Rate of Return if State Occurs
State of Economy Probability of State of Economy Stock A Stock B
Recession 0.10 0.06 -0.20
Normal 0.50 0.08 0.14
Boom 0.40 0.14 0.33
Required:
(a) Calculate the expected return for Stock A. (Do not round your intermediate calculations.)
(b) Calculate the expected return for Stock B. (Do not round your intermediate calculations.)
(c) Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.)
(d) Calculate the standard deviation for Stock B. (Do not round your intermediate calculations.)