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Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Rate of Return if State
Consider the following information:
State of Economy | Probability of State of Economy | Rate of Return if State Occurs Stock A | Rate of Return if State Occurs Stock B |
Recession | 0.20 | 0.05 | -0.18 |
Normal | 0.55 | 0.08 | 0.11 |
Boom | 0.25 | 0.13 | 0.28 |
Calculate the expected return for the two stocks (Round your answer to 2 decimal places (e.g., 32.16))
Expected Return:
Stock A= %
Stock B= %
Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)
Standard Deviation
Stock A= %
Stock B= %
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