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Consider the following information: Economy Recession Normal Boom E(RA) E(RB) Probability of State Rate of Return if State Occurs of Economy Stock A Stock B
Consider the following information: Economy Recession Normal Boom E(RA) E(RB) Probability of State Rate of Return if State Occurs of Economy Stock A Stock B -.25 .15 .38 .20 .55 25 a. Calculate the expected return for the two stocks. (Do not round intermediate calculations and enter your answers as rounded to 2 decimal places, e.g., 32.16.) JA Expected return b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers rounded to 2 decimal places, e.g., 32.16.) .010 .090 .140 Standard deviation 1%
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