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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(TA,s) E(rs,s) Recession 0.1 -0.06
We know the following expected returns for stocks A and B, given different states of the economy State (s) Probability E(TA,s) E(rs,s) Recession 0.1 -0.06 0.03 Normal 0.5 0.09 0.06 Expansion 0.4 0.17 0.1 18 Attempt 1/10 for 10 pts. Part 1 What is the expected return for stock A? 3+ decimals Submit 18 - Attempt 1/10 for 10 pts. Part 2 What is the expected return for stock B? 3+ decimals Submit Attempt 1/10 for 10 pts. Part 3 What is the standard deviation of returns for stock A? 3+ decimals Submit Attempt 1/10 for 10 pts. Part 4 What is the standard deviation of returns for stock B? 4+ decimals Submit
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