Suppose your expectations regarding the stock market are as follows:

State of the Economy	Probability	HPR
Boom	0.2	37%
Normal growth	0.6	22
Recession	0.2	20

E(r)=ss=1p(s)r(s)==1

Var(r)2=ss=1p(s)[r(s)E(r)]2Var2==1[-]2

SD(r)=Var(r)=Var

Required:

Use above equations to compute the mean and standard deviation of the HPR on stocks.