Question: please help with part 3 &4 We know the following expected returns for stocks A and B. given different states of the economy State (s)
We know the following expected returns for stocks A and B. given different states of the economy State (s) Probability E[TA) ET) Recession 0.3 -0.03 0.01 Normal 0.5 0.12 0.04 Expansion 0.2 0.2 0.08 Note: if you can it is much faster to solve these problems in a spreadsheet. However, the answer cannot be had simply by using the built-in AVERAGE() on STDEVO functions. If you are somewhat familiar with Excel, you might look into the SUMPRODUCTO function which is widely used to calculate weighted sums. Attempt 1/2 for 10 pts Part 1 What is the expected return for stock A? 091 Correct B Attempt 1/2 for 10 pts Part 2 What is the expected return for stock B? 030 Correct Attempt 1/2 for 10 pts Part 3 What is the standard deviation of returns for stock A? decimal Submit Attempt 1/2 for 10 pts Part 4 What is the standard deviation ci returns for stock
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