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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.)

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92166988

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