What is the standard deviation of these expected returns

Reference no: EM13301567

During a normal economy, the common stock of Douglass & Frank is expected to return 12.5 percent. During a recession, the expected return is -5 percent and during a boom, the expected return is 18 percent. The probability of a normal economy is 65 percent while the probability of a recession is 25 percent and the probability of a boom is 10 percent. What is the standard deviation of these expected returns?

A. 7.49 percent
B. 8.06 percent
C. 8.68 percent
D. 10.33 percent
E. 11.47 percent

Reference no: EM13301567

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