Consider the following information:

State Probability ABC, Inc.

Boom 0.25 0.15

Normal 0.50 0.08

Slowdown 0.15 0.04

Recession 0.10 -0.03

What is the expected return?

What is the variance?

What is the standard deviation?

Consider the following information

State Probability X Z

Boom 0.25 15% 10%

Normal 0.60 10% 9%

Recession 0.15 5% 10%

What is the expected return and standard deviation for a portfolio with an investment of $6,000 in asset X and $4,000 in asset Z?