You are analyzing ABC stock and predicting the probabilities for different economic conditions next years...
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Finance
You are analyzing ABC stock and predicting the probabilities for different economic conditions next years and the corresponding return information as follows.
Economic Condition
Probability for Economic Condition
ABC stock returns (HPR)
Boom
0.20
0.15
Normal
0.30
0.05
Recession
0.50
-0.08
What is the standard deviation for this ABC stock investment?
*Hint: You should find E(R) first and calculate standard deviation accordingly.
Please round your answer to the fourth decimal. For example, 0.1234.
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