Question: The table below provides a probability distribution for the returns on stocks A and B. State Prob. Return on stock A Return on stock
The table below provides a probability distribution for the returns on stocks A and B. State Prob. Return on stock A Return on stock B 2332 1234 5% 50% 10% 30% 15% 10% 20% -10% Calculate: 1. Expected return of stock A 2. Expected return of stock B 3. Standard deviation of stock A 4. Standard deviation of stock B 5. Covariance between stocks A and B 6. Correlation between stocks A and B 7. Expected return of a portfolio consisting 75% of A and 25% of B. 8. Standard deviation of a portfolio consisting 75% of A and 25% of B.
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