1. Calculate the standard deviation of the expected return given the economic states, their likelihoods, and the potential returns. Economic State Probability Return Fast Growth 0.3 25% Slow Growth 0.5 6% w w Recession 6x -5% Depression 2x -17% 1. A company that has a beta of 1.3 will earn a return of 15% in the coming year. It is observed that the expected rate of return on the market is 13% and the rate on T-Bills is 5%. Based on your firm's level of risk, determine the return it should earn and based on your position state, give reasons if the firm is over or undervalued