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The following information has been provided for the following shares: State of the Economy Probability Share A (Expected Return) Share B (Expected Return) Poor 25%

The following information has been provided for the following shares:

State of the Economy

Probability

Share A

(Expected Return)

Share B

(Expected Return)

Poor

25%

-8%

-8%

Moderate

25%

4%

-1%

Good

25%

8%

5%

Strong

25%

14%

10%

Expected Return

4.5%

a) Calculate the expected return of Share B. Express your answer as a decimal to four decimal places, for example if your answer is 0.98764, type 0.9876 (1 Mark)

Answer: Answer (Keep 4 decimal places)

b) Calculate the standard deviation of Share B. Express your answer as a decimal to four decimal places, for example if your answer is 0.98764, type 0.9876 (2 Marks)

Answer: Answer (Keep 4 decimal places)

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