Consider the following information:

Rate of Return

if State Occurs

State of

Economy Probability of

State of

Economy Stock A Stock B

Recession .35 .07 .20

Normal .60 .12 .12

Boom

a. Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

b. Calculate the standard deviation for the two stocks. (Do not round your intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)