8. a. Expected return of A = 0.10*0.04
+0.6*0.09+0.3*0.17=10.90%
Expected Return of B= 0.10*-0.17 +0.6*0.12+0.3*0.27 = 13.60%
b. Standard Deviation of A =
(0.10*(0.04-10.90%)^2+0.6*(0.09-10.90%)^2+0.3*(0.17-10.90%)^2)^0.5=4.25%
Standard Deviation of B= (0.10*(-0.17-13.60%)^2
+0.6*(0.12-13.60%)^2+0.3*(0.27-13.60%)^2)^0.5= 12.21%
Consider the following information 8 Rate of Return if State Occurs State of Probability of Economy...
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