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 15 .06 -19 Normal .60 .09 10 Boom 25 14 .27 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.) Answer is not complete. a. Stock A expected return 9.80 % 9.90 % % b. Stock B standard deviation 15.42 % a. Stock B expected return b. Stock A standard deviation

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