Question
There is a 30% probability of a below average economy and a 70% probability of an average economy. If there is a below average economy
There is a 30% probability of a below average economy and a 70% probability of an average economy. If there is a below average economy stocks A and B will have returns of -3% and -4%, respectively. If there is an average economy stocks A and B will have returns of 6% and 18%, respectively. Calculate the expected returns and standard deviations of stocks A and B. ANSWER IN DECIMAL NOT PERCENT
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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