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A security can be in one of four states next year: i) a good state with a return of 35% (this happens with probability =
A security can be in one of four states next year: i) a good state with a return of 35% (this happens with probability = 0.30); ii) a normal state with a return of 15% (this happens with probability = 0.50); and iii) a bad state with a return of 0% (this happens with probability = 0.15). iv) a disaster state with a return of -48% (this happens with probability = 0.05). What are, respectively, the expected rate of return and the standard deviation of the rate of return? expected return = (round answer to nearest two decimal places) standard deviation = (round answer to nearest two decimal places)
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