Intro We know the following expected returns for stocks A and B, given the different states of the economy:

State (s) Probability E(rA,s) E(rB,s)

Recession 0.3 -0.02 0.03

Normal 0.5 0.13 0.06

Expansion 0.2 0.21 0.1

Part 1 What is the expected return for stock A? 3+ decimals

Part 2 What is the expected return for stock B? 3+ decimals

Part 3 What is the standard deviation of returns for stock A? 3+ decimals

Part 4 What is the standard deviation of returns for stock B? 4+ decimals