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Following are four economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.36 60 % Slow growth 0.40 16 Recession
Following are four economic states, their likelihoods, and the potential returns:
Economic State | Probability | Return | |||
Fast growth | 0.36 | 60 | % | ||
Slow growth | 0.40 | 16 | |||
Recession | 0.14 | 12 | |||
Depression | 0.10 | 36 | |||
|
Compute the expected return and standard deviation. (Do not round intermediate calculations and round your answers to 2 decimal places.)
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