Question
There is a 13% probability of a below average economy and a 87% probability of an average economy. If there is a below average economy
There is a 13% probability of a below average economy and a 87% probability of an average economy. If there is a below average economy stocks A and B will have returns of -4% and -5%, respectively. If there is an average economy stocks A and B will have returns of 7% and 5%, respectively. Calculate the expected returns and standard deviations of stocks A and B. Stock A Expected Return (4 decimals) = ___________ Stock B Expected Return (4 decimals) = __________ Stock A Standard Deviation (4 decimals) = ____________ Stock B Standard Deviation (4 decimals) = ____________
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