A stock is expected to earn 15 percent in a boom economy and 7 percent in a normal economy. There is a 35 percent chance the economy will boom and a 65.0 percent chance the economy will be normal. What is the standard deviation of these returns?

3.82 Percent

4.85 Percent

4.97 Percent

5.63 Percent

3.

A portfolio consists of 24 percent Stock A, 54 percent Stock B, and 22 percent Stock C. What is the portfolio expected return given the following:

State of Economy	Probability of State of Economy	Stock A Returns	Stock B Returns	Stock C Returns
Normal	.75	16%	9%	26%
Recession	.25	2	19	24

10.55 percent

11.94 percent

8.24 percent

12.47 percent