The Performance of the Common Stock of Creekside Stores Is

Multiple Choice

The performance of the common stock of Creekside Stores is highly dependent upon the state of the economy. In a boom economy, the stock is expected to return 24% in comparison to 11% in a normal economy and a negative 18% in a recessionary period. The probability of a recession is 10%. There is a 20% chance of a boom economy. The remainder of the time the economy will be at normal levels. What is the standard deviation of the returns on Creekside stock?

A) 10.68%
B) 10.85%
C) 11.13%
D) 11.22%
E) 11.28%