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Rate of Return if State Occurs Probability of State of State of Stock A Stock B Economy Recession Economy .20 .05 -.20 Normal .40 .10

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Rate of Return if State Occurs Probability of State of State of Stock A Stock B Economy Recession Economy .20 .05 -.20 Normal .40 .10 .10 Boom .40 .13 .25 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.) Expected return for A Expected return for B % % 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.) Standard deviation for A % Standard deviation for B %

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