Question
Given the following possible expected returns over the three different states of the economy, the data for a share of Hilton Hotels Group's common stock
Given the following possible expected returns over the three different states of the economy, the data for a share of Hilton Hotels Group's common stock is demonstrated below:
State of the Economy Probability (p_each state) Anticipated Rate of Return (r)
Recession 10.00% -1.00%
Normal Year 30.00% 8.00%
Boom 60.00% 18.00%
Based on the data table, calculate the expected return and standard deviation for a share of Hilton Hotels Group's common stock respectively.
A. 13.10% expected return and 8.25% standard deviation
B. 13.20% expected return and 7.40% standard deviation
C. 13.20% expected return and 42.00% standard deviation
D. 13.10% expected return and 6.48% standard deviation
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