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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 0.20 0.05

Consider the following information:

Rate of Return if State Occurs
State of Economy Probability of State of Economy Stock A Stock B
Recession 0.20 0.05 -0.21
Normal 0.70 0.09 0.15
Boom 0.10 0.14 0.34

Required:
(a)

Calculate the expected return for Stock A. (Do not round your intermediate calculations.)

(Click to select)8.70%8.85%10.39%11.03%7.80%

(b)

Calculate the expected return for Stock B. (Do not round your intermediate calculations.)

(Click to select)9.70%9.33%11.19%9.22%10.09%

(c)

Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.)

(Click to select)2.37%1.67%2.49%2.25%2.46%

(d)

Calculate the standard deviation for Stock B. (Do not round your intermediate calculations.)

(Click to select)16.35%11.56%18.16%15.53%17.00%

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