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Consider the following information: Rate of Return if State Occurs State of Probability of State Economy of Economy Stock A Stock B Recession .22 .020
Consider the following information: |
Rate of Return if State Occurs | |||
State of | Probability of State | ||
Economy | of Economy | Stock A | Stock B |
Recession | .22 | .020 | .37 |
Normal | .57 | .100 | .27 |
Boom | .21 | .260 | .50 |
Requirement 1: |
Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) |
Expected return | |
E(RA) | % |
E(RB) | % |
Requirement 2: |
Calculate the standard deviation for the two stocks. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) |
Standard deviation | |
A | % |
B | % |
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