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Consider the following information:    Rate of Return if State Occurs   State of Economy Probability of...

Consider the following information:

  

Rate of Return if State Occurs
  State of Economy Probability of State of Economy Stock A Stock B
  Recession 0.20 0.05 -0.21
  Normal 0.70 0.07 0.14
  Boom 0.10 0.13 0.31

  

Required:
(a)

Calculate the expected return for Stock A. (Do not round your intermediate calculations.)
7.20% 7.85% 8.81% 10.03% 6.24%

  

(b)

Calculate the expected return for Stock B. (Do not round your intermediate calculations.)
8.70% 8.00% 10.14% 8.27% 9.05%

  

(c)

Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.)
2.09% 1.48% 2.19% 1.98% 2.17%

  

(d)

Calculate the standard deviation for Stock B. (Do not round your intermediate calculations.)
15.68% 11.09% 17.46% 14.89% 16.31%
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