A Manager Is Attempting to Assess the Probability of a Recession

Multiple Choice

A manager is attempting to assess the probability of a recession ending in the next six months,and its impact on expected profitability.The manager believes there is a 75 percent chance the recession will end in six months and profits will return to $400 million.However,there is a 25 percent chance the recession will not end in six months,resulting in a $5 million loss.The standard deviation of profits over the next six months is:

A) $175.37million.
B) $320.18 million.
C) $286.39 million.
D) $0 million.