1. Calculate the expected return and standard deviation for the following stock: (4 points) Stock return 25% -5% State Boom Bust Probability 0.4 0.6 (Probability of Boom Rate of Return in Boom) + (Probability of Bust ROR in Bust) (.4 x 25%) = .10 (6x -5%) = 1:03 .07 ((0.4 x.25) + (06x-.05)) = 10-03 = 07