1) Stock A has the following returns for various states of the economy:

State of the Economy Probability Stock A's Return

Recession 10% -30%

Below Average 20% -2%

Average 40% 10%

Above Average 20% 18%

Boom 10% 40%

Stock A's expected return is

A) 5.4%.

B) 7.2%.

C) 8.2%.

D) 9.6%

2) State of the Economy Probability for Stock Ws Return

Recession 10% -30%

Below Average 20% -2%

Average 40% 10%

Above Average 20% 18%

Boom 10% 40%

Stock Ws standard deviation is

a) 17%

b) 14%

c) 20%

d) 10%