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Study the problem below and compute for the Expected return for Stock A and Stock B; the Variance and the Standard Deviation. STATE Probability A
Study the problem below and compute for the Expected return for Stock A and Stock B; the Variance and the Standard Deviation.
STATE | Probability | A | B |
Boom | ? | 0.2 | 0.1 |
Normal | 0.25 | 0.3 | 0.4 |
Recession | 0.4 | 0.4 | 0.2 |
Round off the final answers in 4 decimal points in all answers. For uniformity's sake, we will not use percentages for the rate of returns, we will just use its decimal form.
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