What are the standard deviations for a and b

Reference no: EM13265107

State	Probability	A Return	B Return
Boom	.20	18%	-7%
Normal	.50	10%	6%
Bust	.30	5%	12%

Besides, Stock A has a beta of 0.8 and stock B has a beta of 1.7

A. What are the expected rates of return for stocks A and B?

B. What are the standard deviations for A and B

C. What are the coefficients of variation for A and B? Which stock is more risky? Why?

D. If you equally invest your money in A and B to form a portfolio, what would be your portfolio's expected rate of return? What would be your portfolio's beta?

Reference no: EM13265107

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