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We know the following expected returns for stocks A and B, given different states of the economy: State (s) Probability E(r A,s ) E(r B,s
We know the following expected returns for stocks A and B, given different states of the economy:
State (s) | Probability | E(rA,s) | E(rB,s) |
---|---|---|---|
Recession | 0.3 | -0.02 | 0.03 |
Normal | 0.5 | 0.13 | 0.06 |
Expansion | 0.2 | 0.21 | 0.1 |
Part 1
What is the expected return for stock A? (3+ decimals)
Part 2
What is the expected return for stock B? (3+ decimals)
Part 3
What is the standard deviation of returns for stock A? (3+ decimals)
Part 4
What is the standard deviation of returns for stock B? (4+ decimals)
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