1. Expected Return Compute the expected return given these three economic states, their likelihoods, and the potential returns:

Economic State	Probability			Return
Fast Growth		.2			30.8	%
Slow Growth		.5			6.40	%
Recession		.3			-2.40	%

Multiple Choice

• 17.4%

• 10.1%

• 19.8%

• 8.6%

2. Expected Return Compute the expected return given these three economic states, their likelihoods, and the potential returns:

Economic State	Probability			Return
Fast Growth		.1			18	%
Slow Growth		.8			11	%
Recession		.1			-26	%

Multiple Choice

• 9.7%

• 3.0%

• 13.2%

• 8.0%