Response to the following problem:
The economy of a country may experience rapid growth or moderate growth or recession. There is 0.15 probability of rapid growth and the stock market return is expected to be 19.5 per cent. The probability of moderate growth is 55 per cent with a 14 per cent expectation of the stock market return. There is 0.30 probability of recession and the stock market return is expected to be 7 per cent.
Calculate the expected stock market return and the standard deviation of the return.