Calculate expected return and standard deviation

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Reference no: EM131588290

Calculate the expected return and standard deviation (square root of the variance) of the following probability distribution of returns:

Possible State of Economy Probability of State Return in State

Depression = State 1 0.10 = 10% -0.25 = -25%

Recession = State 2 0.20 = 20% -0.05 = -5%

Moderate Growth = State 3 0.45 = 45% 0.10 = 10%

Fast Expansion = State 4 0.25 = 25% 0.3 = 30%

Reference no: EM131588290

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