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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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