Question: P13-7 Calculating Returns and Standard Deviations [LO1] Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy

P13-7 Calculating Returns and Standard Deviations [LO1]

Consider the following information:

Rate of Return if State Occurs
State of Economy Probability of State of Economy Stock A Stock B
Recession .20 .05 .18
Normal .50 .09 .15
Boom .30 .11 .34

Calculate the expected return for Stock A.

Calculate the expected return for Stock B.

Calculate the standard deviation for Stock A.

Calculate the standard deviation for Stock B.

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