What is the expected standard deviation of the stock

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Reference no: EM13880736

You are interested in buying a stock that has a price of $72. You have projected that next year there is: a 10% probability the stock will equal $1, a 20% probability the stock will equal $44, a 30% probability the stock will equal $83, a 30% probability the stock will equal $95, and a 10% probability the stock will equal $150. Answer the following (showing all work):

(a) what is the expected return on the stock if you buy today and sell next year?

(b) what is the expected standard deviation of the stock?

Reference no: EM13880736

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