We know the following expected returns for stock A and the market portfolio, given different states of the economy:

State (s)	Probability	E(rA,s)	E(rM,s)
Recession	0.3	-0.06	0.01
Normal	0.5	0.09	0.04
Expansion	0.2	0.17	0.08

The risk-free rate is 0.02.

Attempt 1/5 for 9.8 pts.

Part 1

Assuming the CAPM holds (expected and required returns are the same) , what is the beta for stock A?

Part 2:

What is the standard deviation of returns for stock A in decimal?