Question: Problem 13-7 Calculating Returns and Standard Deviations (L01) Consider the following information: Rate of Return If State Occurs State of Probability of State of Economy

Problem 13-7 Calculating Returns and Standard Deviations (L01) Consider the following information: Rate of Return If State Occurs State of Probability of State of Economy Stock A Stock B Economy Recession .21 .06 - .21 Normal .58 .09 .08 Boom .14 .25 21 a. Calculate the expected return for Stocks A and B. (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 Stocks A and B. (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 Stock B expected return b. Stock A standard deviation Stock B standard deviation % % % %

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