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Homework answers / question archive / Consider the following information: State of economy Probability of state Rate of return if state occurs of economy Stock A Stock B Recession 0
Consider the following information:
State of economy Probability of state Rate of return if state occurs
of economy Stock A Stock B
Recession 0.15 0.13 -0.26
Normal 0.30 0.18 0.21
Boom 0.55 0.20 0.24
Calculate the expected return for each stock. (Do not round intermediate calculations. Round the final answers to 2 decimal places).
Calculate the standard deviation for each stock. (Do not round intermediate calculations. Round the final ansveers to 2 decimal places.)
Expected return for stock A = 17.85%
For stock B = 14.85%
Standard deviation for stock A = 2.22%
For stock B = 17.21%