Problem 11-8 Calculating Returns and Standard Deviations (LO1, CFA2)Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Calculate the expected return for the two stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.

State of Economy Probability of state of Economy Rate of return if state occurs

Stock A Stock B

Recession .30 .05 -.15

Normal .55 .15 .15

Boom .15 .20 .35

Calculate the expected return for the two stocks

Expected return for A

Expected return for B

) b. Calculate the standard deviation for the two stocks. (Do not round your intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Stock Deviation for A

standard Deviation for B