Stock expected return and stock standard deviation

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Reference no: EM131341448

Use the following information of rates of return for Stock A and Stock B to answer;

Probability of State

State of Economy of Economy Return on A Return on B

Recession .50 -0.10 0.20

Boom .50 0.30 - 0.10

What comes closest to Stock A’s expected return and Stock B’s standard deviation?

A. Stock A’s expected return is 10% and Stock B’s standard deviation is 15%

B. Stock A’s expected return is 10% and Stock B’s standard deviation is 2%

C. Stock A’s expected return is 10% and Stock B’s standard deviation is 0%

D. Stock A’s expected return is 15% and Stock B’s standard deviation is 15%

E. Stock A’s expected return is 15% and Stock B’s standard deviation is 0%

Reference no: EM131341448

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