Question

Consider the following information:

  

Rate of Return if State Occurs

  State of Economy

Probability of State of Economy

Stock A

Stock B

  Recession

0.10

0.05

-0.22

  Normal

0.60

0.09

0.13

  Boom

0.30

0.13

0.33

Required:

(a)	Calculate the expected return for Stock A. (Do not round your intermediate calculations.)
	(Click to select)9.80%8.52%11.54%10.70%8.94%

  

(b)	Calculate the expected return for Stock B. (Do not round your intermediate calculations.)
	(Click to select)15.50%8.00%17.28%14.73%16.12%

  

(c)	Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.)
	(Click to select)2.40%1.70%2.52%2.28%2.50%

  

(d)	Calculate the standard deviation for Stock B. (Do not round your intermediate calculations.)
	(Click to select)15.37%10.87%17.14%14.60%15.99%

Answer 1