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Problem 11-5 Calculating Returns and Standard Deviations You have been given the following information: State of Economy Probability of State of Economy Rate of Return
Problem 11-5 Calculating Returns and Standard Deviations
| You have been given the following information: |
| State of Economy | Probability of State of Economy | Rate of Return if State Occurs | |
|---|---|---|---|
| Stock A | Stock B | ||
| Recession | .18 | .07 | .18 |
| Normal | .55 | .10 | .11 |
| Boom | .27 | .15 | .28 |
| a. | Calculate the expected return for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b. | Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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International Project Finance
Authors: Felix I. Lessambo
1st Edition
3030963896, 978-3030963897
