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The table below summarizes information on the future returns on stocks A and B. Rate of Return if State of Economy Occurs State of Economy
The table below summarizes information on the future returns on stocks A and B. |
Rate of Return if State of Economy Occurs | |||
State of Economy | Probability of State of Economy | Stock A | Stock B |
Thumbs up | .10 | .02 | .17 |
Normal | .60 | .08 | .15 |
Thumbs down | .30 | .15 | .34 |
Stock A's expected return is: |
Stock B's expected return iis: |
Stock A's standard deviation of returns is: |
Stock B's standard deviation of returns is: |
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