Question: Please show work* 3. Based on the following data: (a) calculate the expected return and the standard deviation of returns for each stock. 4% State

Please show work* 3. Based on the following data: (a) calculate

Please show work*

3. Based on the following data: (a) calculate the expected return and the standard deviation of returns for each stock. 4% State of the Economy Probability Stock A Rate of Return Stock B Rate of Return Recession 0.2 -20% Normal Growth 0.65 8% 20% Boom 0.15 16% 60% (b) Calculate the expected return and the standard deviation on the portfolio, where the portfolio is formed by investing 50% of the funds in Stock A and the rest in Stock B. (c) Calculate the expected return and the standard deviation on the portfolio, where the portfolio is formed by investing 70% of the funds in Stock A and the rest in Stock B. (From Chapter 11) 3. Based on the following data: (a) calculate the expected return and the standard deviation of returns for each stock. 4% State of the Economy Probability Stock A Rate of Return Stock B Rate of Return Recession 0.2 -20% Normal Growth 0.65 8% 20% Boom 0.15 16% 60% (b) Calculate the expected return and the standard deviation on the portfolio, where the portfolio is formed by investing 50% of the funds in Stock A and the rest in Stock B. (c) Calculate the expected return and the standard deviation on the portfolio, where the portfolio is formed by investing 70% of the funds in Stock A and the rest in Stock B. (From Chapter 11)

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