Problem 1 of lesson 11 assignment

(Please show me the steps)

Problem 1

There is a 20.90% probability of a below average economy and a 79.10% probability of an average economy. If there is a below average economy stocks A and B will have returns of 1.20% and 8.30%, respectively. If there is an average economy stocks A and B will have returns of 9.80% and 2.60%, respectively. Compute the: a) Expected Return for Stock A (0.75 points):

b) Expected Return for Stock B (0.75 points):

c) Standard Deviation for Stock A (0.75 points):

d) Standard Deviation for Stock B (0.75 points):