Problem $13-7$ Calculating Returns and Standard Deviations $($LO$1)$

Consider the following information:

Rate of Return if State Occurs

State of Economy Probability of State of Economy Stock A Stock B

Recession $0\mathrm{.}150\mathrm{.}060\mathrm{.}23$

Normal $0\mathrm{.}550\mathrm{.}150\mathrm{.}20$

Boom $0\mathrm{.}300\mathrm{.}260\mathrm{.}25$

Calculate the expected return for each stock. $($Do not round intermediate calculations. Round the final answers to $2$ decimal places.$)$

Expected return

Stock A

$16\mathrm{.}95$

$\%$

Stock B

$15\mathrm{.}05$

$\%$

Calculate the standard deviation for each stock. $($Do not round intermediate calculations. Round the final answers to $2$ decimal places.$)$

Standard deviation

Stock A

$\%$

Stock B

$\%$