BUS 405 Week 4 Discussion 1 ( Expected Returns and Deviation ) ~ ( Latest Syllabus - Perfect Tutorial - Scored 100% )
Expected Returns and Deviation
Complete Problems 1, 2, and 3 from the Questions and Problems section of Chapter 11 (shown below). Remember to complete all parts of the questions, and report the results of your analysis. Respond to at least two of your classmates’ posts outside of your own thread.
a. Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone.
State of Economy | Probability of State of the Economy | Security Return if State Occurs |
Recession | .30 | -8% |
Normal | .40 | 13 |
Boom | .30 | 23 |
Using the information in the previous question, calculate the standard deviation of returns.
Repeat Questions 1 & 2 assuming that all three states are equally likely.
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