Problem 11-7 Calculating Returns and Standard Deviations [LO 1] Consider the following information: State of Probability...
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Problem 11-7 Calculating Returns and Standard Deviations [LO 1] Consider the following information: State of Probability of State Rate of Return if State Occurs Economy Recession Normal Boom of Economy Stock A Stock B .15 .02 -.30 .50 .10 .18 .35 .15 .31 a. Calculate the expected return for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a. Stock A expected return 10.55 % Stock B expected return 15.35 % b. Stock A standard deviation 3.25 % Stock B standard deviation 3.92 % Problem 11-7 Calculating Returns and Standard Deviations [LO 1] Consider the following information: State of Probability of State Rate of Return if State Occurs Economy Recession Normal Boom of Economy Stock A Stock B .15 .02 -.30 .50 .10 .18 .35 .15 .31 a. Calculate the expected return for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a. Stock A expected return 10.55 % Stock B expected return 15.35 % b. Stock A standard deviation 3.25 % Stock B standard deviation 3.92 %
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