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1. Suppose that stock ABC is currently trading at $50 per share. Also, assume that stock ABC pays no dividends and assume that stock ABC

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1. Suppose that stock ABC is currently trading at $50 per share. Also, assume that stock ABC pays no dividends and assume that stock ABC is not going to have a stock split. Your expectations regarding the stock ABC's price a year later are as follows (return column is intentionally left blank, you'll have to find the corresponding return for each state): Return ABC State of the Economy Boom Normal growth Recession Depression Probability 0.1 0.6 0.2 0.1 Price ABC $75 $55 $40 $30 Given this information, calculate the expected return of stock ABC and the standard deviation of returns of stock ABC

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