Consider the following information: Economy Recession Normal Boom a. Probability of State of Economy .21 .56 .23 b. Rate of Return if State Occurs a. Calculate the expected return for the two stocks. (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. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) Stock A .015 .095 .150 Expected return of A Expected return of B Standard deviation of A Standard deviation of B X Answer is complete but not entirely correct. 9.09 12.47 Stock B -.26 .16 .39 % % 3.00 X % % 21.90
Consider the following information: Economy Recession Normal Boom a. Probability of State of Economy .21 .56 .23 b. Rate of Return if State Occurs a. Calculate the expected return for the two stocks. (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. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) Stock A .015 .095 .150 Expected return of A Expected return of B Standard deviation of A Standard deviation of B X Answer is complete but not entirely correct. 9.09 12.47 Stock B -.26 .16 .39 % % 3.00 X % % 21.90
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Kk.146.
Transcribed Image Text:Consider the following information:
Economy
Recession
Normal
Boom
a.
Probability of Rate of Return if State Occurs
State
of Economy
.21
.56
.23
b.
a. Calculate the expected return for the two stocks. (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. (Do not round intermediate
calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
Stock A
.015
.095
.150
Expected return of A
Expected return of B
Standard deviation of A
Standard deviation of B
Stock B
-.26
.16
.39
X Answer is complete but not entirely correct.
9.09
%
12.47 %
3.00 × %
21.90 %
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