Compute the Expected Return and Standard Deviation Given These Four

question 4

Multiple Choice

Compute the expected return and standard deviation given these four economic states, their likelihoods, and the potential returns:
$$\begin{array}{l}\begin{array} { c c r } \text { Eccrorric State }&\text { Probability } & \text { Return } \\\text { fast growth }&0.20 & 60\% \\\text {slow growth }&0.50 & 13\% \\\text { recession }&0.15 & - 45\%\\\text { depression }&0.15 & - 45\%\\\end{array}\end{array}$$

• A) 9.5 percent; 32.43 percent
• B) 9.5 percent; 21.96 percent
• C) 9.5 percent; 18.97 percent
• D) 9.5 percent; 29.18 percent

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