Consider the following information:
Rate of Return if State Occurs
State of
Economy
Probability of
State of Economy
Stock A
Stock B
Recession
0.10
0.05
-0.19
Normal
0.60
0.08
0.12
Boom
0.30
0.16
0.36
Required:
(a)
Calculate the expected return for Stock A. (Do not
round your intermediate calculations.)
10.10%, 9.19%, 11.86%, 11.37%, 9.25%
(b)
Calculate the expected return for Stock B. (Do not
round your intermediate calculations.)
16.10%, 9.67%, 17.91%, 15.30%, 16.74%
(c)
Calculate the standard deviation for Stock A. (Do
not round your intermediate calculations.)
3.96%, 2.80%, 4.16%, 3.76%, 4.12%
(d)
Calculate the standard deviation for Stock B. (Do
not round your intermediate calculations.)
15.88%, 11.23%, 17.67%, 15.08%, 16.51%