1. A stock ABC can be in one of the four economic states in 2020. The return for each state is shown below. The probability of each state is the same = 25%:

   • Good state of the economy will cause the stock to return 35%
   • Normal state of the economy will cause the stock to return 15%
   • A bad state of the economy will cause the stock to be flat, return 0%
   • In case of a severe crash in the economy, the stock will lose 20%

   What is the stocks average return and standard deviation?

   	A.	E(R) = 7.5%; SD 20.2%
   	B.	E(R) = 15.5%; SD 16.0%
   	C.	E(R) = 5.5%; SD 19.1%
   	D.	E(R) = 17.5%; SD 15.4%