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 | 0.2 | -0.02 | 0.05 |
| Normal | 0.5 | 0.13 | 0.08 |
| Expansion | 0.3 | 0.21 | 0.12 |
Part 3
What is the standard deviation of returns for stock A?
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Attempt 1/5 for 10 pts.
Part 4
What is the standard deviation of returns for stock B?
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Authors: Helen F. Ladd, Margaret E. Goertz
2nd Edition
0415838010, 978-0415838016
