### Rate of return-economy probability of state of economy stock

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Consider the following information: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Recession 0.10 0.03 -0.17 Normal 0.60 0.07 0.13 Boom 0.30 0.11 0.32 Required: (a) Calculate the expected return for Stock A. (Do not round your intermediate calculations.) Answer:7.80% correct (b) Calculate the expected return for Stock B. (Do not round your intermediate calculations.) Answer:15.70% correct (c) Calculate the standard deviation for Stock A. (Do not round your intermediate calculations.) (d) Calculate the standard deviation for Stock B. (Do not round your intermediate calculations.)

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