Question

There is a 40.50% probability of a below average economy and a 59.50% probability of an average economy. If there is a below average economy stocks A and B will have returns of -0.10% and 11.30%, respectively. If there is an average economy stocks A and B will have returns of 15.80% and -1.00%, respectively. Compute the:
        a) Expected Return for Stock A:

b) Expected Return for Stock B:

c) Standard Dev for Stock A:

d) Standard Dev for Stock B:

Answer 1