Consider the following information: State of Economy Recession Normal Boom Probability of State of Economy .18 .59 .23 Rate of Return if State Occurs Stock B -.13 16 .33 Stock A .09 .12 17 a. Calculate the expected return for Stocks A and B. (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 Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.)
Consider the following information: State of Economy Recession Normal Boom Probability of State of Economy .18 .59 .23 Rate of Return if State Occurs Stock B -.13 16 .33 Stock A .09 .12 17 a. Calculate the expected return for Stocks A and B. (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 Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.)
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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Finance
- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
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Transcribed Image Text:Consider the following information:
State of Economy
Recession
Normal
Boom
Probability of State
of Economy
.18
.59
a. Stock A expected return
a. Stock B expected return
b. Stock A standard deviation
b. Stock B standard deviation
23
Rate of Return if State Occurs
Stock A
Stock B
.09
-13
16
.33
a. Calculate the expected return for Stocks A and B. (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 Stocks A and B. (Do not round intermediate
calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
Answer is complete but not entirely correct.
12.61
19.37%
2.61
15.23
%
de de de
12
.17
%
%
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