Consider the following information:
Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Recession 0.16 0.05 ? 0.16 Normal 0.62 0.08 0.13 Boom 0.22 0.13 0.30
Calculate the expected return for the two stocks. (Round your answers to 2 decimal places. (e.g., 32.16))
Expected return Stock A % Stock B %
Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
Standard deviation Stock A % Stock B %
| Consider the following information: |
| Rate of Return If State Occurs | |||||||||
| State of | Probability of | ||||||||
| Economy | State of Economy | Stock A | Stock B | ||||||
| Recession | 0.16 | 0.05 | ? | 0.16 | |||||
| Normal | 0.62 | 0.08 | 0.13 | ||||||
| Boom | 0.22 | 0.13 | 0.30 | ||||||
| Calculate the expected return for the two stocks. (Round your answers to 2 decimal places. (e.g., 32.16)) |
| Expected return | |
| Stock A | % |
| Stock B | % |
| Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) |
| Standard deviation | |
| Stock A | % |
| Stock B | % |
Related questions
| Consider the following information: |
| Rate of Return If State Occurs | |||||||||
| State of | Probability of | ||||||||
| Economy | State of Economy | Stock A | Stock B | ||||||
| Recession | 0.17 | 0.06 | (-.17) | ||||||
| Normal | 0.50 | 0.09 | 0.12 | ||||||
| Boom | 0.33 | 0.14 | 0.29 | ||||||
| Calculate the expected return for the two stocks. (Round your answers to 2 decimal places. (e.g., 32.16)) |
| Expected return | |
| Stock A | % |
| Stock B | % |
| Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) |
| Standard deviation | |
| Stock A | % |
| Stock B | % |
Consider the following information on Stocks I :
| state of Economy | Probability of state of economy | rate of return if state occurs |
| recession | 0.22 | 0.045 |
| normal | 0.62 | 0.355 |
| irrational exuberance | 0.16 | 0.215 |
The market risk premium is 11.7 percent, and the risk-free rate is 4.7 percent.
Calculate the beta and standard deviation of Stock I. (Do not round intermediate calculations. Enter the standard deviation as a percent and round both answers to 2 decimal places, e.g., 32.16.)
Stock I
Beta
Standard deviation %
