Problem $8$

A$)$ What is the expected return of stock A that when a recession happens $(45\%$ probability$)$ its return is $6\%$ and when a boom happens $(55\%$ probability$)$ its return is $25\%?$

B$)$ What is the expected return of stock B that when a recession happens $(45\%$ probability$)$ its return is $1\%$ and when a boom happens $(55\%$ probability$)$ its return is $43\%?$

Problem $9$

Taking the same info from the problem above calculate the variance and standard deviation of Stock A and Stock B

Problem $10$

Define systematic risk and unsystematic risk and give examples of each.