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Prob (P) | Stock Return (A) (%) | Stock Return (B) (%) | (P)*Stock A | (P)*Stock B | Deviation [R-E(A)] | Deviation [R-E(B)] | [R-E(A)]^2 | {[R-E(A)]^2}*(P) | [R-E(B)]^2 | {[R-E(B)]^2}*(P) |
0.20 | 0.03 | -0.21 | 0.0060 | -0.0420 | -0.0520 | -0.3280 | 0.0027 | 0.0005 | 0.1076 | 0.0215 |
0.60 | 0.08 | 0.15 | 0.0480 | 0.0900 | -0.0020 | 0.0320 | 0.0000 | 0.0000 | 0.0010 | 0.0006 |
0.20 | 0.14 | 0.35 | 0.0280 | 0.0700 | 0.0580 | 0.2320 | 0.0034 | 0.0007 | 0.0538 | 0.0108 |
0.0820 | 0.1180 | 0.0012 | 0.0329 |
a). Expected return of Stock A, E(A)
= 8.20% or 0.0820
b). Expected return of Stock B, E(B)
= 11.80% or 0.1180
c). Standard Deviation for Stock A
= 3.46% or 0.0346
d). Standard Deviation for Stock B
= 18.14% or 0.1814
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