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Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession 0.10 0.02
Consider the following information: |
Rate of Return if State Occurs | |||
State of Economy | Probability of State of Economy | Stock A | Stock B |
Recession | 0.10 | 0.02 | -0.19 |
Normal | 0.70 | 0.08 | 0.15 |
Boom | 0.20 | 0.11 | 0.36 |
Required: |
(a) | Calculate the expected return for Stock A. (Do not round your intermediate calculations.) |
(Click to select) 8.00% 6.52% 9.65% 8.70% 7.07% |
(b) | Calculate the expected return for Stock B. (Do not round your intermediate calculations.) |
(Click to select) 15.80% 10.67% 17.59% 15.01% 16.43% |
(c) | Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.) |
(Click to select) 2.32% 1.64% 2.44% 2.21% 2.42% |
(d) | Calculate the standard deviation for Stock B. (Do not round your intermediate calculations.) |
(Click to select) 14.25% 10.08% 15.97% 13.54% 14.82% |
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