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

Problem 13-7 Calculating Returns and Standard Deviations [LO1] Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession .16 .04 -.20 Normal .61 .08 .09 Boom .23 .15 .26 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 a. Stock B expected return b. Stock A standard deviation b. Stock B standard deviation 8.89 % % % % W

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