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What is the expected return and standard deviation for the following stock? State of Economy Probability of State of Economy Rate of Return if State

What is the expected return and standard deviation for the following stock?

State of Economy Probability of State of Economy Rate of Return if State Occurs
Recession 0.10 -0.19
Normal 0.60 0.17
Boom 0.30 0.35

Multiple Choice

  • 15.49 percent; 14.28 percent
  • 15.49 percent; 14.67 percent
  • 18.80 percent; 14.95 percent
  • 18.80 percent; 15.74 percent
  • 18.80 percent; 16.01 percent

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