Consider the following information:

Rate of Return if State Occurs
State of Probability of State
Economy of Economy Stock A Stock B
Recession .15 .02 –.30
Normal .50 .10 .18
Boom .35 .15 .31

a.
Calculate the expected return for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

The expected returns of stocks A and B are 0.11 and 0.19 respectively, while their standard deviations are 0.16 and 0.22 respectively.

How do we calculate expected returns and standard deviations of stocks?

Note: See the attached photo for the calculations of the expected returns and standard deviations of stocks A and B.

a. From the attached photo, we have:

Expected return of stock A = 0.11

Expected return of stock B = 0.19

b. Also, from the attached photo, we have:

Standard deviation of stock A = 0.16

Standard deviation of stock B = 0.22

Learn more about expected returns here: https://brainly.com/question/17152687.

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