Question: PLEASE DONT USE EXCEL Your colleague is considering purchasing either Stock A or Stock B (but not both), and has compiled the following data based

PLEASE DONT USE EXCEL Your colleague is considering purchasing either Stock

PLEASE DONT USE EXCEL

Your colleague is considering purchasing either Stock A or Stock B (but not both), and has compiled the following data based on the expected returns in three different economic states. State of the Probability Rate of Return of State of if State Occurs Economy Economy Stock A Stock B Recession 0.20 .05 -.17 Normal 0.55 .08 .12 Boo 0.25 .13 .29 a. Calculate the expected return for Stock A and Stock B. (2 marks) b. If the variance for Stock A is 0.00076275 and for Stock B is: 0.02380475 Calculate the standard deviation for Stock A and Stock B. (2 marks) c. If you were advising your colleague, who was risk-averse, which stock would VOL recommend huving2 clearly onlain your answer 11 mark)

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