Answer:
Standard deviation = 7.59
Explanation:
Standard deviation is the sum of the squared deviation of the individual return from the mean return under different scenarios
The mean return = ∑R×P
r- return under circumstance, P- probability
Mean return =(0.3×20%) + (0.4×10%) + (0.3×5%)
= 11.5%
Outcome R (R- r )^2 P×(R- r )^2
Strong 20 0.3×(20-11.5)^2 21.67
Normal 10 0.4×(10-11.5)^2 23.4
Weak 5 0.3×(5%-11.5)^2 2.67
57.75
Standard deviation = √57.75 = 7.59
