Question

Consider the following information:

  

				Rate of Return If State Occurs
State of	Probability of
Economy	State of Economy			Stock A			Stock B
Recession		.20			.08		−	.15
Normal		.50			.11			.14
Boom		.30			.16			.31

  

a.	Calculate the expected return for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b.	Calculate the standard deviation for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a.Stock A expected return%Stock B expected return%b.Stock A standard deviation%Stock B standard deviation%

Answer 1