Based on the following information, calculate the expected return and standard deviation for Stock A and Stock B. Input area: State Probability Stock A Stock B Recession 0.15 0.04 (0.17) Normal 0.55 0.09 0.12 Boom 0.30 0.17 0.27 (Use cells A6 to D9 from the given information to complete this question.) Output area: Stock A Probability Return Product Return deviation Squared deviation Product Recession Normal Boom B э O Standard deviation Stock B 2 Recession 3 Normal 4 Boom 5 26 Standard Deviation 27 28 E(R) Variance Probability Return Product Return deviation Squared deviation Product E(R) Variance

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Based on the following information, calculate the expected return and standard deviation for Stock A and Stock B.
Input area:
State Probability
Stock A
Stock B
Recession
0.15
0.04
(0.17)
Normal
0.55
0.09
0.12
Boom
0.30
0.17
0.27
(Use cells A6 to D9 from the given information to complete this question.)
Output area:
Stock A Probability
Return
Product
Return deviation
Squared deviation
Product
Recession
Normal
Boom
B
э
O Standard deviation
Stock B
2
Recession
3 Normal
4 Boom
5
26 Standard Deviation
27
28
E(R)
Variance
Probability
Return
Product
Return deviation
Squared deviation
Product
E(R)
Variance
Transcribed Image Text:Based on the following information, calculate the expected return and standard deviation for Stock A and Stock B. Input area: State Probability Stock A Stock B Recession 0.15 0.04 (0.17) Normal 0.55 0.09 0.12 Boom 0.30 0.17 0.27 (Use cells A6 to D9 from the given information to complete this question.) Output area: Stock A Probability Return Product Return deviation Squared deviation Product Recession Normal Boom B э O Standard deviation Stock B 2 Recession 3 Normal 4 Boom 5 26 Standard Deviation 27 28 E(R) Variance Probability Return Product Return deviation Squared deviation Product E(R) Variance
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