Standard deviation for stock a and stock b

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State of the economy 

Probability of Occurrence 

Expected Return on Stock A in this state

Expected Return on Stock B in this state

High growth 

0.15          

44%

32%

Medium growth 

0.30

30%

21%

No growth 

0.25

12%

8%

Economic slowdown 

0.20

3%

4%

Recession

0.10

-10%

1%

Consider below the expected rate of return on Stock A and Stock B under different possible states of the economy: 

a. Calculate the expected rate of return for stock A and stock B. 

b. Calculate the standard deviation for stock A and stock B. 

Reference no: EM133121793

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