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Please help solve for all. The expected market return and risk for different assumptions about the state of the economy is shown below. State of
Please help solve for all.
The expected market return and risk for different assumptions about the state of the economy is shown below. State of Economy Fast growth Slow growth No growth Recession Depression Probability of State 0.11 0.38 0.27 0.18 0.06 Expected Market Return 35% 17% 7% -17% -35% a. Compute the expected return and standard deviation. (Round your answers to 2 decimal places.) % Expected return Standard deviation % b. Compute the expected return and risk for the following 2 scenarios: (Round your answers to 2 decimal places.) Scenario 1: State of Economy Fast growth Slow growth No growth Recession Depression Probability of State 0.14 0.34 0.29 0.18 0.95 Expected Market Return 29% 12% 4% -16% -30% Scenario 1: Expected Market Return 29% Probability of State 0.14 0.34 0.29 0.18 0.05 State of Economy Fast growth Slow growth No growth Recession Depression 12% 4% -16% -30% % Expected return Standard deviation % Scenario 2: State of Economy Fast growth Slow growth No growth Recession Depression Probability of State 0.14 0.33 0.37 0.14 0.02 Expected Market Return 35% 12% 4% -17% -38% % Expected return Standard deviation %Step by Step Solution
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