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State of Economy		Probability of State		Return on Asset A in State		Return on Asset B in State		Return on Asset C in State
Boom		0.34		0.04		0.26		0.28
Normal		0.54		0.04		0.08		0.15
Recession		0.12		0.04		0.05		0.25

Expected return and standard

deviation.

Use the following information to answer the questions:

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.

a.What is the expected return of each asset?

b.What is the variance of each asset?

c.What is the standard deviation of each asset?

Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type.

a.What is the expected return of asset A?

nothing

(Round to four decimal places.)