Problem:
Financial analysts believe that there are four equally likely states of the economy: depression, recession, normal, and boom times. The returns on the Supertech Company are expected to follow the economy closely, while the returns on the Slowpoke Company are not. The return predictions are as follows:
Supertech Returns Slowpoke Returns
Depression -20% 5%
Recession 10% 15%
Normal 25% 13%
Boom 45% 9%
Calculate the expected return for each company.
Based on the data above, calculate the variance.