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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 .20 .05
Consider the following information:
Rate of Return if State Occurs | |||||||||||
State of Economy | Probability of State of Economy | Stock A | Stock B | ||||||||
Recession | .20 | .05 | .20 | ||||||||
Normal | .40 | .10 | .10 | ||||||||
Boom | .40 | .13 | .25 | ||||||||
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.)
(I have already answered this part)
For A: 10.2% For B: 10%
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.)
Standard deviation for A ____________ %
Standard deviation for B _____________%
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