Question

Calculate the standard deviation with the help of following data: p=.3 r=30%, p=.4 r= l6%, p=.3 r=8%


• 74.76
• 24.92
• 4.21
• 8.64

Answer 1

Answer:

Explanation:

Rate of return is calculated by multiplying potential outcomes with probability of occurrence. And at last all the addends are added at lasts.

In this problem

\begin{array}{l}{P_{1} =.30, P_{2} =.40, P_{3} =.30} \\ {R_{1} =30 \% R_{2} =16 \% R_{3} =8 \%}\end{array}

To find solution: \left(P_{1} \times R_{1}\right)+\left(P_{2} \times R_{2}\right)+\left(P_{3} \times R_{3}\right)

Expected return = (0.30 \times 0.30)+(0.40 \times 0.16)+(0.30 \times 0.80)

= 0.09 + 0.064 + 0.24

= 0.394

Expected return = 39.4%