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  3. you are given the following information corporate

You are given the following information corporate stock P and the market: : A. The...

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Finance

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You are given the following information corporate stock P and the market: : A. The annual effective risk-free rate is 9. B. The expected return and volatility for corporate stock P and the market are shown in the table below: Expected Return Volatility corporate stock P 6 21 Market 4 21 C. The correlation between the returns of corporate stock P and the market is 20. Assume the Capital Asset Pricing Model holds. Calculate the required return for corporate stock P? tate probability Return RETURN on A ON B 40% -0.06 -0.09 POOR NORMAL 35% 0.16 0.11 GOOD 25% 0.35 0.3 Weight a Weight b 4 .6 what is the return of stock a what is the return of stock b what is the standard deviation on stock a? what is the standard deviation on stock b

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