Compute the standard deviation of the return as a percentage

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Reference no: EM13148161

May someone please help me solve this econ330 problem with step to step explanations. I feel so lost. The question is as follows: Assume that the economy can experience high growth, normal growth, or recession. Your expectation is that, under these conditions, the stock market return for the coming year: State of Economy Probability Stock Market Return High Growth 0.2 +30% Normal Growth 0.7 +12% Recession 0.1 -15% a) Compute the expected value of a $1000 investment both in dollars and as a percentage over the coming year. b) Compute the standard deviation of the return as a percentage over the coming year c) If the risk-free return is 7%, what is the risk free premium for a stock market investment?

Reference no: EM13148161

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