Question: Hello, this is one question with multiple steps. Please do not answer if youre unable to do A-D. Thank you. Consider the following information: Rate

Hello, this is one question with multiple steps. Please do not answer if youre unable to do A-D. Thank you.

Consider the following information:

Rate of Return if State Occurs

State of Economy

Probability of State of Economy

Stock A

Stock B

Recession

0.10

0.04

-0.19

Normal

0.50

0.07

0.13

Boom

0.40

0.12

0.33

Required:

(a)

Calculate the expected return for Stock A.

(Choices) 7.62% 9.14% 8.70% 7.69% 9.05%

(b)

Calculate the expected return for Stock B.

(Choices) 17.80% 9.00% 18.69% 18.51% 16.91%

(c)

Calculate the standard deviation for Stock A.

(Choices) 2.00% 2.69% 2.83% 2.94% 2.97%

(d)

Calculate the standard deviation for Stock B.

(Choices) 14.70% 16.24% 15.47% 16.09% 10.94%

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