Question: After extensive analysis, you predict the following returns for stocks A and B for three possible outcomes. Assume there are only three possible outcomes. Outcome

After extensive analysis, you predict the following returns for stocks A and B for three possible outcomes. Assume there are only three possible outcomes.

Outcome

Probability

Annual return

Stock A

Stock B

Boom

20%

20%

30%

Normal

50%

15%

20%

Recession

30%

-10%

-15%

Calculate the following statistics: (1/1000 of one percent without % sign, e.g. 12.671, if a negative percentage, -9.56):

1) Expected return for stock A: Answer

2) Expected return for stock B: Answer

3) Standard deviation for stock A: Answer

4) Standard deviation for stock B: Answer

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