Consider the following information: Probability of Rate of Return if State Occurs Economy Recession Normal State of Economy Stock A Stock B .20 .010 -.35 Boom .55 .25 .090 .25 .240 .48 a. Calculate the expected return for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the standard deviation for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a. Expected return of A 11.15 % Expected return of B 18.75 % b. Standard deviation of A % Standard deviation of B %
Consider the following information: Probability of Rate of Return if State Occurs Economy Recession Normal State of Economy Stock A Stock B .20 .010 -.35 Boom .55 .25 .090 .25 .240 .48 a. Calculate the expected return for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the standard deviation for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a. Expected return of A 11.15 % Expected return of B 18.75 % b. Standard deviation of A % Standard deviation of B %
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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