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.)