Question: I need the answer to the standard deviation stock A Question. Problem 13-7 Calculating Returns and Standard Deviations [LO1] Consider the following information: Rate of
I need the answer to the standard deviation stock A Question.
Problem 13-7 Calculating Returns and Standard Deviations [LO1]
| Consider the following information: |
|
|
| Rate of Return If State Occurs | |||||||
| State of | Probability of | ||||||||
| Economy | State of Economy | Stock A | Stock B | ||||||
| Recession |
| .21 |
|
| .06 |
| .21 |
| |
| Normal |
| .58 |
|
| .09 |
|
| .08 |
|
| Boom |
| .21 |
|
| .14 |
|
| .25 |
|
| Calculate the expected return for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
|
| Expected return |
| Stock A | % 9.42 |
| Stock B | % 5.48 |
| Calculate the standard deviation for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
|
| Standard deviation |
| Stock A | % ? |
| Stock B | % 15.25 |
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