Compute expected rate of return on each stock and market

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Reference no: EM13477498

Consider the following scenario analysis for Stocks A and B and for the market portfolio (M)



Rate of Return


State of Economy

Probability of State

Stock A %

Stock B %

Market %


 

 

 

 

 

 

Boom

0.1

30

45

    33


Good

0.6

12

10

    15


Average

0.2

1

-15

-5


Bust

0.1

-20

-30

-9


a) Calculate the expected rate of return on each stock and the market?

b) Find the standard deviation of returns for each asset?

Reference no: EM13477498

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