Question: The following table shows the expected returns from six different stocks in three different states of the economy: MAY YOU SHOW EXCEL WORK State of
The following table shows the expected returns from six different stocks in three different states of the economy: MAY YOU SHOW EXCEL WORK
| State of Economy | Probability | Return Stock A | Return Stock B | Return Stock C | Return Stock D | Return Stock E | Return Stock F |
| Growth | 1/3 | 30% | 3% | 15% | 24% | 0% | 18% |
| Status Quo | 1/3 | 22% | 1% | 3% | 6% | 3% | 3% |
| Recession | 1/3 | 20% | 4% | -3% | -6% | 6% | -3% |
- Calculate the expected return for each stock.
- Calculate the standard deviation for each stock.
| State of Economy | Probability | Return for Stock A | Return for Stock B | Return for Stock C | Return for Stock D | Return for Stock E | Return for Stock F |
| Growth | 1/3 | 30% | 3% | 15% | 24% | 0% | 18% |
| Status Quo | 1/3 | 22% | 1% | 3% | 6% | 3% | 3% |
| Recession | 1/3 | 20% | 4% | -3% | -6% | 6% | -3% |
| A) Expected Returns | |||||||
| E[RA] | E[RB] | E[RC] | E[RD] | E[RE] | E[RF] | ||
| B) Standard Deviations | |||||||
| A | B | C | D | E | F | ||
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