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Use the following information to answer Q17 and Q18 You are considering investing in a stock (equity) with the following possible outcomes States Probability of

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Use the following information to answer Q17 and Q18 You are considering investing in a stock (equity) with the following possible outcomes States Probability of Investment Occurrence Returns State 1: Economic boom 18% 2096 State 2: Economic 42% 16% growth State 3: Economic 30% 3% decline State 4: Depression 10% -2594 17. Calculate the expected rate of return for this investment A) 8.72%, B) 7.35%. C) 3.50%, D) 2.18% ANSWER: 18. Calculate the standard deviation of returns for this investment, A) 17.62% B) 12.99% C) 1.69% D) 3.10%

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