Question: Based on the following information, calculate the expected return and standard deviation for the two stocks: State of Economy Probability of State of Economy Rate

Based on the following information, calculate the expected return and standard deviation for the two stocks:

State of Economy Probability of State of Economy Rate of Return If State Occurs

Stock A Stock B

Recession ................. 15 ......................................... 04 ................... -.17

Normal .................... 55 ......................................... 09 .................... .12

Boom ..................... 30 ......................................... 17 .................... .27

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