Question
Problem 11-8 Calculating Returns and Standard Deviations (LO1, CFA2) Consider the following information: Rate of Return if State Occurs State of Economy Probability of State
Problem 11-8 Calculating Returns and Standard Deviations (LO1, CFA2)
Consider the following information:
| Rate of Return if State Occurs | |||||||||||
| State of Economy | Probability of State of Economy | Stock A | Stock B | ||||||||
| Recession | .35 | .07 | .17 | ||||||||
| Normal | .40 | .09 | .16 | ||||||||
| Boom | .25 | .13 | .36 | ||||||||
a. Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
b. Calculate the standard deviation for the two stocks. (Do not round your intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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Finance And Sustainable Development
Authors: Magdalena Ziolo
1st Edition
0367819767, 978-0367819767
