Problem 13-7 Calculating Returns and Standard Deviations [LO1]

Consider the following information:

				Rate of Return If State Occurs
State of	Probability of
Economy	State of Economy			Stock A			Stock B
Recession		.17			.08			.12
Normal		.58			.11			.17
Boom		.25			.16			.34

Calculate the expected return for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return

Stock A

%

Stock B

%

Calculate the standard deviation for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

	Standard deviation
Stock A	%
Stock B	%