Find standard deviation

Assignment Help Finance Basics
Reference no: EM1343767

The following information is given:

ECONOMY PROBABILITY STOCK A STOCK B
Recession 0.2 0.02 -0.21
Normal 0.6 0.09 0.13
Boom 0.2 0.11 0.32

I found the expected rate of return for stock A and B, which is 8% and 10% respectively. I need to find the standard deviation of both A and B as well. I tried calculating using excel using both the given rates of return for both A and B, as well as the STDEVA of the combined rates of return x their given probabilities in each economic condition. Neither worked. What am I doing wrong? Can you show me the long way to get standard deviation of both A and B?

 

Reference no: EM1343767

Questions Cloud

Which of the subsequent represents a positive macroeconomic : Which of the subsequent represents a positive macroeconomic statement. Assume the United States can produce Toyotas at the cost.
Program management-acquisition and evaluation : Define Program Management (within the DoD) and list three traits of an effective program manager. What are Acquisition Categories (ACATs) and why is the Milestone Decision Authority (MDA) important?
Show how an increase in your companys accounts payable : Show how an increase in your company's accounts payable from one period to the next is a means to maintain high cash balances in your company's bank account.
Given expected price level policies for reaching potential : Given the expected price level, policies for reaching potential GDP will work best if the funds provide.
Find standard deviation : I found the expected rate of return for stock A & B, which is 8% and 10 percent respectively. I need to determine the standard deviation of both A and B as well.
Accounting issues of acquisitions : Mention and describe three accounting issues related to acquisitions. What role does the controller play in addressing these issues?
Find the formula to calculate hv value : What is the value of SGP to Brau and find the formula to calculate HV Value?
Cisco systems and successful acquisitions : Investigate the approach that Cisco Systems has used in its many successful acquisitions. What are some of the human resource practices that have made its acquisitions successful?
Explain why an industry in a perfectly competitive market : Explain why an industry in a perfectly competitive marketplace would choose to remain in business, if its profit is zero at equilibrium.

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Computation of payback period

Computation of payback period and he company expects, as a result, cash flows of $979,225, $1,158,886

  Present value of future amounts

Find out the present value of the following future amounts?

  Currencies of industrialized countries

Why do you think the bid/ask spread is higher for pesos than it is for currencies of industrialized countries. Elucidate how does this affect a U.S. firm which does substantial business in Mexico.

  Calculation irr, npv, mirr, payback and discounted payback

Calculation IRR, NPV, MIRR, payback and discounted payback and if the projects are mutually exclusive, which would you recommend

  Future financial challenges and opportunities-us airways

This solution provides the learner with challenges and opportunities that US Airways may face in the coming years that would potential require financial management and analysis.

  Tax questions

The tax act passed in 2001 raised the contribution limit on the IRA's from $2,000 to $5,000 by 2008. What impact, if any, would you expect this provision to have on the personal savings?

  Annual coupon interest rate

Outstanding bonds have a $1,000 par value and will mature in 5 years, yield to maturity is 9%-Find out the bonds's annual interest rate?

  Computation of cost of capital

Computation of cost of capital and compute the cost of capital of investing in a project with a beta of 0.8

  Present value at optimal time to sell

You own 100 acres of timberland, with young timber worth $20,000 if logged today. This represents 500 cords of wood at $40 per cord. What is the present value at the optimal time to sell and when does it occur?

  Computing the average return for treasury bills

Computing the average return for treasury bills and calculate the average return for Treasury bills and the average annual inflation rate

  Statement regarding 401(k) plans

Determine the correct statement regarding 401(k) plans

  Calculate the value of security

Calculate the value of security and Value the financial instrument below using excel functions

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd