You are evaluating the risk of one stock. It is expected to earn 19% return next year if the economy is normal; and earn

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answerhappygod
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You are evaluating the risk of one stock. It is expected to earn 19% return next year if the economy is normal; and earn

Post by answerhappygod »

You are evaluating the risk of one stock. It is expected to earn
19% return next year if the economy is normal; and earns a netative
10% if the economy falls into a recession. The probability of a
normal economy is 89%. What is the standard deviation of the
returns on this stock?
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