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

Consider the following information:

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

Calculate the expected return for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

	Expected return
Stock A	%
Stock B	%

Calculate the standard deviation for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

	Standard deviation
Stock A	%
Stock B	%

Problem 13-7 Calculating Returns and Standard Deviations [LO1] Consider the following information: Rate of Return If State Occurs Stock A Stock B State of Probability of State of Economy Economy Recession .19 Normal 56 Boom 25 08 .11 .16 - 19 10 .27 Calculate the expected return for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return Stock A Stock B Calculate the standard deviation for each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Stock A Stock B Standard deviation % %