Consider returns R on a stock XYZ in the follwoing 4 states of he economy. each with
Question:
Consider returns R on a stock XYZ in the follwoing 4 states of he economy. each with probability p
Boom state: p=0.15, R=35%
Normal state: p=???, R=8%
Slowdown state: p=0.1, R=1%
Recession state: p=0.2, R = -33%
What is the expected return for stock XYZ? Quote your answer to 1 decimal place, but do not type the "%" Do not round intermediate results.
For the situation used in question 1 (expected return), what is the expected variance of returns? Quote your answer in %-squared (but leave out the units of "%^2" in what you type in) to one decimal place. Do not round intermediate results.
For the situation used in question 1 (expected return calculation), what is the expected standard deviation of returns? Quote your answer in % (but leave out the units of "%" in what you type in) to one decimal place. Do not round intermediate results.
