Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Rate of Return If State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession .17 .05 .21 Normal .62 .09
Rate of Return If State Occurs | |||||||||
State of Economy | Probability of | ||||||||
State of Economy | Stock A | Stock B | |||||||
Recession | .17 | .05 | .21 | ||||||
Normal | .62 | .09 | .08 | ||||||
Boom | .21 | .16 | .25 | ||||||
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.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started