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P13-7 Calculating Returns and Standard Deviations [LO1] Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy
P13-7 Calculating Returns and Standard Deviations [LO1]
| Consider the following information: |
| Rate of Return if State Occurs | |||
| State of Economy | Probability of State of Economy | Stock A | Stock B |
| Recession | 0.10 | 0.03 | -0.22 |
| Normal | 0.70 | 0.08 | 0.13 |
| Boom | 0.20 | 0.15 | 0.34 |
| Required: |
| (a) | Calculate the expected return for Stock A. (Do not round your intermediate calculations.) |
| (b) | Calculate the expected return for Stock B. (Do not round your intermediate calculations.) |
| (c) | Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.) |
| (d) | Calculate the standard deviation for Stock B. (Do not round your intermediate calculations.) |
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