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

Problem 13-7 Calculating Returns and Standard Deviations [LO1] Consider the following information: Rate of Return if State Occurs Probability of State State of Economy of Economy Stock A Stock B Recession .18 .09 -13 Normal .59 12 .16 Boom .23 .17 .33 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 % % % %

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