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Intro You've estimated the following expected returns for a stock, depending on the strength of the economy: State (s) Probability Expected return Recession 0.2 -0.02

Intro

You've estimated the following expected returns for a stock, depending on the strength of the economy:

State (s) Probability Expected return
Recession 0.2 -0.02
Normal 0.5 0.09
Expansion 0.3 0.14

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Part 1

What is the expected return for the stock?

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Part 2

What is the standard deviation of returns for the stock?

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