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Consider the following two stocks. Probabilities (Pi) Stock a Stock b Recession P1 = 25% -3% 3% Normal P2 = 37% 8% -2% Boom

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Consider the following two stocks. Probabilities (Pi) Stock "a" Stock "b" Recession P1 = 25% -3% 3% Normal P2 = 37% 8% -2% Boom P3 = 38% 15% 28% What is the expected return of each stock? Enter your answers as a percentage rounded to 2 decimal places. Do not enter the percentage sign in your answer. Ta= 7.91 Correct response: 7.910.01 Fb = 10.65 Correct response: 10.650.01 Click "Verify" to proceed to the next part of the question. This question has 4 parts (i.e., you will be clicking "Verify" 4 times) Using the correct answers from the previous question, what is the standard deviation of each stock? Enter your answer as a percentage rounded to 2 decimal places. Do not enter the percentage sign in your answer. SDa= Number SD = Number

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