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Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Recession .25 .05
Consider the following information:
Rate of Return If State Occurs | |||||||||||
State of | Probability of | ||||||||||
Economy | State of Economy | Stock A | Stock B | ||||||||
Recession | .25 | .05 | .17 | ||||||||
Normal | .60 | .11 | .18 | ||||||||
Boom | .15 | .15 | .38 | ||||||||
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. Omit the "%" sign in your response.) |
Expected return for A | % |
Expected return for B | % |
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. Omit the "%" sign in your response.) |
Standard deviation for A | % |
Standard deviation for B | % |
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