The returns on shares of Brison, Inc and Clayton Corp are predicted under the following

economic conditions (Attached Photo):

a. What is the expected returns of each stock?

b. What is the standard deviations of each stock?

c. What is the correlation between the stocks?

Transcribed Image Text:

Return Return Economic Condition Probability on on Brison Clayton wwwwwww Recession 15% +20% -30% Stagnant 30% 0% -5% Moderate 35% +10% +10% Boom 20% +30% +50% Return Return Economic Condition Probability on on Brison Clayton wwwwwww Recession 15% +20% -30% Stagnant 30% 0% -5% Moderate 35% +10% +10% Boom 20% +30% +50%

Answer rating: 100% (QA)

To calculate the expected returns of each stock we multiply the return under each economic condition by the probability of that condition and sum them up For Brison Inc Expected Return 015 30 03 5 035 ... View the full answer