Question 39: A stock has the following probability distribution: If economy is good (the probability is 25%), its expected stock return is 20%; if economy is on average (the probability is 50%), its expected stock return is 10%; if economy is bad (the probability is 25%), its expected return is -20%. Find the expected rate of return for the stock

a. 5%

b. 6%

c. 10%

d. 14%

Question 40

Using the data from Question 39, find the standard deviation (risk) for Hamiltons stock

		11.3%
		12.6%
		13.6%
		15.0%

Question 41

Using the results from Question 39 and 40, compute the ratio of the standard deviation to the expected return for the stock

		2.3
		2.5
		2.8
		3.0