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 0.10 0.06 -0.20

Normal 0.60 0.07 0.13

Boom 0 .30 0.11 0.33

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