1) Stock A has the following returns for various states of the economy:
State of the Economy Probability Stock A's Return
Recession 10% -30%
Below Average 20% -2%
Average 40% 10%
Above Average 20% 18%
Boom 10% 40%
Stock A's expected return is
A) 5.4%.
B) 7.2%.
C) 8.2%.
D) 9.6%
2) State of the Economy Probability for Stock Ws Return
Recession 10% -30%
Below Average 20% -2%
Average 40% 10%
Above Average 20% 18%
Boom 10% 40%
Stock Ws standard deviation is
a) 17%
b) 14%
c) 20%
d) 10%