Question: Consider the following information: Probability of State Rate of Return if State Occurs Economy of Economy Stock A Stock B Recession .24 .030 .39

Consider the following information: Probability of State Rate of Return if State Occurs Economy of Economy Stock A Stock B

Recession .24 .030 – .39

Normal .59 .110 .29

Boom .17 .280 .52

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.) Expected return E(RA) % E(RB) %

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.) Standard deviation σA % σB %

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