You have decided to invest your money in two shares C and D. You also know that the economy can go into either depression or growth. You think you are twice as likely to see economic growth, as you are to see economic depression. You also know the following about your two stocks:

State of the Economy

Probability

R_A

R_B

Growth

?

10%

2%

Depression

?

6%

40%

1. Calculate the expected return for stocks C and D 2. Calculate the total risk (variance and standard deviation) for stock C and stock D.