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Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Recession .15 .06
| Consider the following information: |
| State of Economy | Probability of State of Economy | Rate of Return if State Occurs | |
|---|---|---|---|
| Stock A | Stock B | ||
| Recession | .15 | .06 | .19 |
| Normal | .60 | .09 | .10 |
| Boom | .25 | .14 | .27 |
| a. | Calculate the expected return for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b. | Calculate the standard deviation for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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Finance for Executives Managing for Value Creation
Authors: Gabriel Hawawini, Claude Viallet
4th edition
9781133169949, 538751347, 978-0538751346
