Question: Problem 11-7 Calculating Returns and Standard Deviations [LO 1] Consider the following information: Rate of Return if State Occurs Probability of State of Economy Stock
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Problem 11-7 Calculating Returns and Standard Deviations [LO 1] Consider the following information: Rate of Return if State Occurs Probability of State of Economy Stock A State of Economy Recession Normal Boom .22 Stock B -32 .045 .62 . 125 .210 .22 .45 .16 Requirement 1: Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected return E(RA) E(RB) Requirement 2: Calculate the standard deviation for the two stocks. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Standard deviation
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