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Consider the following information: Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Recession .20 .035 .40 Normal
Consider the following information:
Economy | Probability of State of Economy | Rate of Return if State Occurs | |
---|---|---|---|
Stock A | Stock B | ||
Recession | .20 | .035 | .40 |
Normal | .60 | .115 | .30 |
Boom | .20 | .290 | .53 |
1. 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.
2. 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.
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