1. There is a 40.70% probability of a below-average economy and a 59.30% probability of an average economy. If there is a below-average economy, Stocks A and B will have returns of -5.56% and -5.22% , respectively. If there is an average economy, Stocks A and B will have returns of 5.19% and 4.71%, respectively. Compute the following for Stocks A and B: (Please write answers as percentages (e.g. .1234 should be written as 12.34):

1. Stock A Expected Return: %
2. Stock B Expected Return: %
3. Stock A Standard Deviation: %
4. Stock B Standard Deviation: %

2. A stock has monthly returns of 1.1%, -1.92% , 0.25% , and -0.83%. What is the stock's geometric average return? Please write answer as a percentage (e.g. .1234 should be written as 12.34).

Answer rating: 100% (QA)

1 Stocks A and B Expected Returns and Standard Deviations 1 Stock A Expected Return Expected Return ... View the full answer