The Probability of the Economy Booming Is 10 Percent,while It

Multiple Choice

The probability of the economy booming is 10 percent,while it is 60 percent for being normal,and 30 percent for being recessionary.A stock is expected to return 16 percent in a boom,11 percent in a normal economy,and lose 8 percent in a recession.What is the standard deviation of the returns?

A) 5.80 percent
B) 7.34 percent
C) 8.38 percent
D) 9.15 percent
E) 9.87 percent