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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 0.03

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 0.03 -0.21
Normal 0.60 0.07 0.12
Boom 0.20 0.13 0.31

Required:
(a)

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

(Click to select)7.40%7.19%9.02%9.37%6.45%

(b)

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

(Click to select)9.20%7.33%10.66%8.74%9.57%

(c)

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

(Click to select)3.20%2.26%3.36%3.04%3.33%

(d)

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

(Click to select)16.80%11.88%18.64%15.96%17.47%

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