Consider the following information: State of Economy Recession Normal Boom Probability of State of Economy 20 57 23 a. Stock A expected return a. Stock B expected return b. Stock A standard deviation b. Stock B standard deviation Rate of Return if State Occurs Stock A Stock B .05 -.20 08 13 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 intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.) 09 26 % % %
Consider the following information: State of Economy Recession Normal Boom Probability of State of Economy 20 57 23 a. Stock A expected return a. Stock B expected return b. Stock A standard deviation b. Stock B standard deviation Rate of Return if State Occurs Stock A Stock B .05 -.20 08 13 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 intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.. 32.16.) 09 26 % % %
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
Problem 1PS
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Vijay
Transcribed Image Text:Consider the following information:
State of Economy
Recession
Normal
Boom
Probability of State
of Economy
.20
.57
23
a. Stock A expected return
a. Stock B expected return
b. Stock A standard deviation
b. Stock B standard deviation
Rate of Return if State Occurs
Stock B
-.20
.09
26
Stock A
.05
.08
13
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 intermediate
calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
%
%
%
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