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Question 1) Based on the following table, calculate the expected return and standard deviation for stock A. What is the expected return for stock A?
Question 1) Based on the following table, calculate the expected return and standard deviation for stock A.
What is the expected return for stock A?
Question 2) What is the standard deviation for stock A?
Please express the expected return and standard deviation in four decimal places:
e.g. 0.1362
\begin{tabular}{lccc} \begin{tabular}{l} State of \\ Economy \end{tabular} & \begin{tabular}{c} Probability of State of \\ Economy \end{tabular} & \begin{tabular}{c} Rate of Return If State \\ Occurs \end{tabular} \\ \cline { 3 - 4 } & & Stock A & Stock B \\ \hline Recession & .15 & .04 & -.17 \\ Normal & .55 & .09 & .12 \\ Boom & .30 & .17 & .27 \end{tabular}Step by Step Solution
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