Question: We know the following expected returns for stocks A and B, given different states of the economy : State (s) Probability E(ra) (B) Recession 0.1

We know the following expected returns for stocks A and B,

We know the following expected returns for stocks A and B, given different states of the economy : State (s) Probability E(ra) (B) Recession 0.1 -0.03 0.05 Nomal 0.5 0.12 0.08 Expansion 0,4 0.2 0.12 IR Attempt 2/3 for 9.5 pts. Part 1 What is the expected return for stock A? 13.7% To Attempt 1/3 for 10 pts. Part 2 What is the expected return for stock B? 9.3% Attempt 1/3 for 10 pts. Part 3 What is the standard deviation of returns for stock A? 3+ decimals

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