Variance and standard deviation (expected). Hull Consultants, a farrous think tank in the Midwest, has provided probability estimates for the four potential economic states for the coming year in the following table: The probability of a boom economy is 13%, the probability of a stable growth economy is 20%, the probability of a stagnant economy is 45%, and the probability of a recession is 22%. Calculate the variance and the standard deviation of the three investments: stock, corporate bond, and government bond. If the estimates for both the probabilities of the economy and the returns in each state of the economy are correct, which investment would you choose, considering both risk and retum? Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type. What is the variance of the stock investment? |% (Round to six decimal places.) What is the standard deviation of the stock investment? % (Round to two decimal places.) What is the variance of the corporate bond investment? % (Round to six decimal places.) What is the standard deviation of the corporate bond investment? 1% (Round to two decimal places.) What is the variance of the government bond investment? 1% (Round to six decimal places.) What is the standard deviation of the government bond investment? % (Round to two decimal places.) If the estimates for both the probabilities of the economy and the returns in each state of the economy are correct, which investment would you choose, considering both risk and retum? (Select the best response.) O A. The corporate bond would be the best choice because it has the highest expected return and the lowest risk. OB. There is not enough information to make this decision. OC. The goverment bond would be the best choice because it has the lowest risk. OD. The stock investment would be the best choice because it has the highest volatility and therefore the best chance of a high ratum. Boom Investment Stock Corporate bond Government bond Forecasted Returns for Each Economy Stable Growth Stagnant 10% 4% 7% 6% 4% 27% 10% 9% Recession - 15% 4% 3% 5%