Question: Problem 13-7 Calculating Returns and Standard Deviations [LO1] Consider the following information: State of Economy Probability of State of Economy Rate of Return if State

Problem 13-7 Calculating Returns and Standard Deviations [LO1]

Consider the following information:

State of Economy Probability of State of Economy Rate of Return if State Occurs
Stock A Stock B
Recession .19 .08 .19
Normal .56 .11 .10
Boom .25 .16 .27

a. Calculate the expected return for Stocks A and B. b. Calculate the standard deviation for Stocks A and B

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