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You have been given the following information: State of Economy Recession Normal Boom Probability of Rate of Return if State Occurs State of Economy
You have been given the following information: State of Economy Recession Normal Boom Probability of Rate of Return if State Occurs State of Economy Stock A Stock B .21 .06 -.21 .58 .09 .08 .21 .14 .25 a. Calculate the expected return for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. a. Stock A expected return a. Stock B expected return 3.75 % 5.48 % b. Stock A standard deviation 9.22 % b. Stock B standard deviation 10.30 %
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