Purchase Solution

Calculating expected return and standard deviation

Not what you're looking for?

Ask Custom Question

Based on the following information, compute the expected return and standard deviation for Stock A and Stock B.

Rate of Return if State Occurs
State of Economy Probability of State Stock A Stock B
of Economy

Recession 0.2 0.04 -0.21
Normal 0.6 0.08 0.13
Boom 0.2 0.12 0.33.

Purchase this Solution

Solution Summary

Solution describes the steps to calculate expected return and standard deviation of the returns in the given cases.

Solution Preview

Please refer attached file for better clarity of table and formulas.

Stock A
Probability Returns
P R P*R (R-Mean Return)^2 P*(R-Mean Return)^2
Recession 0.2 0.04 0.008 0.0016 0.00032
Normal 0.6 0.08 ...

Solution provided by:
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution


Free BrainMass Quizzes
Terms and Definitions for Statistics

This quiz covers basic terms and definitions of statistics.

Measures of Central Tendency

This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.

Know Your Statistical Concepts

Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.

Measures of Central Tendency

Tests knowledge of the three main measures of central tendency, including some simple calculation questions.