Economy Probability Stock A Stock B Recession -30% -20% 10% 5% 40% 15% Average Boom 0.25 0.50 0.25 What is the standard deviation of Stock A?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Economy Probability Stock A Stock B
Recession
-30%
-20%
10%
5%
40%
15%
Average
Boom
What is the standard deviation of Stock A?
18.8%
24.9%
12.9%
0.25
0.50
0.25
20.0%
Transcribed Image Text:Economy Probability Stock A Stock B Recession -30% -20% 10% 5% 40% 15% Average Boom What is the standard deviation of Stock A? 18.8% 24.9% 12.9% 0.25 0.50 0.25 20.0%
In general, portfolio risk is
O Greater; increases
Less; increases
O Greater: decreases
O Less: decreases
than stand-alone risk because diversification
risk.
Transcribed Image Text:In general, portfolio risk is O Greater; increases Less; increases O Greater: decreases O Less: decreases than stand-alone risk because diversification risk.
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