Question: Questions and Problems Q7. Calculating Returns and Standard Deviations. (a) Based on the following information, calculate the expected return and standard deviation for the two

Questions and Problems Q7. Calculating Returns and Standard Deviations. (a) Based on the following information, calculate the expected return and standard deviation for the two stocks. State of Probability of Rate of return if State Occurs Economy State of Economy Stock A Stock B Recession .20 .01 -0.25 Normal .55 .09.15 Boom 25 .14 .38 () What is the expected return on a portfolio consisting of 80% in A and the balance in B? (What is the standard deviation of the portfolio in (b)

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