Question: Problem 13-7 Calculating Returns and Standard Deviations (LOI) Consider the following information: Rate of Return if State Occurs State of Economy Recession Normal Boom Probability

Problem 13-7 Calculating Returns and Standard Deviations (LOI) Consider the following

Problem 13-7 Calculating Returns and Standard Deviations (LOI) Consider the following information: Rate of Return if State Occurs State of Economy Recession Normal Boom Probability of State of Economy .20 .57 .23 Stock A .05 .08 .13 Stock B -.20 .09 .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 %

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