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Homework answers / question archive / Based on on the following information calcuate the expected return and standard deviation for Stock A aand Stock B:       Rate of Return if state Occurs Rate Of return If state Occurs   State Of Economy Probability of State of Economy Stock A Stock B   Recession

Based on on the following information calcuate the expected return and standard deviation for Stock A aand Stock B:       Rate of Return if state Occurs Rate Of return If state Occurs   State Of Economy Probability of State of Economy Stock A Stock B   Recession

Finance

Based on on the following information calcuate the expected return and standard deviation for Stock A aand Stock B:

      Rate of Return if state Occurs Rate Of return If state Occurs
  State Of Economy Probability of State of Economy Stock A Stock B
  Recession .10 .04 -.17
  Normal .60 .09 .12
  Boom .30 .17 .27

Please show work and formula

pur-new-sol

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Stock A          
Scenario Probability Return% =rate of return% * probability Actual return -expected return(A)% (A)^2* probability
Recession 0.1 4 0.4 -6.9 0.0004761
Normal 0.6 9 5.4 -1.9 0.0002166
Boom 0.3 17 5.1 6.1 0.0011163
           
  Expected return %= sum of weighted return = 10.9 Sum=Variance Stock A= 0.00181
      Standard deviation of Stock A% =(Variance)^(1/2) 4.25
           
Stock B          
Scenario Probability Return% =rate of return% * probability Actual return -expected return(A)% (B)^2* probability
Recession 0.1 -17 -1.7 -30.6 0.0093636
Normal 0.6 12 7.2 -1.6 0.0001536
Boom 0.3 27 8.1 13.4 0.0053868
           
  Expected return %= sum of weighted return = 13.6 Sum=Variance Stock B= 0.0149
      Standard deviation of Stock B% =(Variance)^(1/2) 12.21