Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Consider the following information:
Rate of Return if State Occurs
State of Economy
Probability of State
of Economy
Stock A
Stock B
Recession
121
.06
-21
Normal
58
09
108
Boom
21
14
125
a. Calculate the expected return for Stocks A and B. (Do not round Intermediate
calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
b. Calculate the standard deviation for Stocks A and B. (Do not round Intermedlate
calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
a. Stock A expected return
a. Stock B expected return
b. Stock A standard deviation
b. Stock B standard deviation
%
96
2/6
96
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Transcribed Image Text:Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession 121 .06 -21 Normal 58 09 108 Boom 21 14 125 a. Calculate the expected return for Stocks A and B. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for Stocks A and B. (Do not round Intermedlate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a. Stock A expected return a. Stock B expected return b. Stock A standard deviation b. Stock B standard deviation % 96 2/6 96
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