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Calculating returns and standard deviations: Based on the following information, calculate the expected return and standard deviation for the two stocks. State of economy Probability

Calculating returns and standard deviations: Based on the following information, calculate the expected return and standard deviation for the two stocks.

State of economy

Probability of state economy

Rate of Return if state occurs Stock A

Rate of Return if state occurs Stock B

Recession

.30

.02

-.20

Normal

.55

.08

.13

Boom

.30

.13

.33

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