Calculate variance and standard deviation for stocks a

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Reference no: EM13281563

Assume you have predicted the following returns for Stock A and B in four possible states of the economy. What is the expected return of each stock? Calculate the variance and standard deviation for Stocks A and B.

State

Probability

Stock A Return

Stock B Return

Expansion

.15

22%

17%

Normal

.50

15%

12%

Mild Recession

.20

5%

2%

Recession

.15

1%

-2%

 

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Reference no: EM13281563

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