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(7) Calculating Returns and Standard Deviations - [LO1] : Based on the following information, calculate the expected return and standard deviation for the two stocks.
(7) Calculating Returns and Standard Deviations - [LO1] :
Based on the following information, calculate the expected return and standard deviation for the two stocks.
STATE OF ECONOMY | PROBABILITY OF STATE OF ECONOMY | Rate of Return If State Occurs - Stock A | Rate of Return if State Occurs - Stock B | |
Recession | .15 | .04 | -.17 | |
Normal | .55 | .09 | .12 | |
Boom | .30 | .17 | .27 |
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