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7 Consider the following information: Probability of Rate of Return if State Occurs Economy State of Economy Stock A Stock B Recession .22 .045

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7 Consider the following information: Probability of Rate of Return if State Occurs Economy State of Economy Stock A Stock B Recession .22 .045 -.42 Normal Boom .62 .16 .125 32 .310 .55 a. Calculate the expected return for the two stocks. Note: 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 the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a. Expected return of A Expected return of B b. Standard deviation of A Standard deviation of B % % % %

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