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You've estimated the following expected returns for a stock, depending on the strength of the economy: State (s) Probability Expected return Recession 0.3 -0.02 Normal
You've estimated the following expected returns for a stock, depending on the strength of the economy:
| State (s) | Probability | Expected return |
| Recession | 0.3 | -0.02 |
| Normal | 0.5 | 0.09 |
| Expansion | 0.2 | 0.14 |
1. What is the expected return for the stock?
2. What is the standard deviation of returns for the stock?
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The Complete Personal Finance Handbook
Authors: Teri B Clark
1st Edition
160138047X, 978-1601380470
