Based on the following information, calculate the expected return and standard deviation: State of Probability of Rate

Question:

Based on the following information, calculate the expected return and standard deviation:

State of Probability of Rate of Return

Economy State of Economy if State Occurs

Depression...........................0.15..............................2.105

Recession.............................0.30..............................0.059

Normal.................................0.45..............................0.130

Boom...................................0.10..............................0.211

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...