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Consider the following two stocks. Stock A Stock B Recession 14% 7% Probabilities (Pi) pi = 32% P2 = 30% P3 = 38% 10% Normal

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Consider the following two stocks. Stock "A" Stock "B" Recession 14% 7% Probabilities (Pi) pi = 32% P2 = 30% P3 = 38% 10% Normal Boom -15% 29% 119% The portfolio weights for stocks "A" and "B" are 0.15 and 0.85, respectively. What are the expected returns of stock "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES. E(ra) = 8.94 Correct response: 8.94 E (ru) = 8.76 Correct response: 8.76 Click "Verify" to proceed to the next part of the question. Using the correct answers from the previous question, what are the standard deviations of stocks "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES. SDa = Number SDb Number

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