Question

Consider the following information:

Rate of Return If State Occurs
State of Probability of
Economy State of Economy Stock A Stock B
Recession .18 .07 − .18
Normal .55 .10 .11
Boom .27 .15 .28


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.)

a.stock A expected return ____%
stock B expected return ____%
b.stock A standard deviation ____%
stock B standard deviation ____%

Answer 1

B because your not rounding and in this case you need to intermediate the calculations