We know the following expected returns for stocks A and B, given different states of the economy:
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Question:
We know the following expected returns for stocks A and B, given different states of the economy: State (s) Probability E(rA,s) E(rB,s) Recession 0.3 -0.03 0.02 Normal 0.5 0.12 0.05 Expansion 0.2 0.2 0.09 Attempt 1/10 for 10 pts. Part 1 What is the expected return for stock A?
Part 2 What is the expected return for stock B?
Part 3 What is the standard deviation of returns for stock A?
Part 4 What is the standard deviation of returns for stock B?
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