The market and Stock J have the following probability distributions:

Probability rM rJ 0.3 16 % 21 % 0.4 10   3   0.3 19   12  

1. Calculate the expected rates of return for the market and Stock J. Round your answers to one decimal place.

   Expected rate of return (Market):    %

   Expected rate of return (Stock J):    %

2. Calculate the standard deviations for the market and Stock J. Do not round intermediate calculations. Round your answers to two decimal places.

   Standard deviation (Market):    %

   Standard deviation (Stock J):    %

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 0.07 − 0.11 Normal 0.57 0.10 0.18 Boom 0.27 0.15 0.35 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 %