11. Risk and Expected Return. A stock will provide a rate of return of either 18% or +26%. If both possibilities are equally likely, calculate the stock's expected return and standard deviation. (LO/L-2) 12. Scenario Analysis and Portfolio Risk. The common stock of Leaning Tower of Pita Inc., a restaurant chain, will generate payoffs to investors next year, which depend on the state of the economy, as follows: (LOUL-2 and LOU-3) 1. The company goes out of business if a recession hits. Calculate the expected rate of return and standard deviation of return to Leaning Tower of Pita shareholders. Assume for simplicity that the three possible states of the economy are equally likely. The stock is selling today for $80. 2. Who would view the stock of Leaning Tower of Pita as a risk-reducing investment - the owner of a gambling casino or a successful bankruptcy lawyer? Explain