A hedge fund has found a stock whose return depends on the state of the economy one year from now. The forecasting departmenthas determined expected returns and probabilities of states to be as follows:

State	Return	Probability
1	10%	50%
2	15%	25%
3	-10%	25%

Question 3 options:

a	Expected return: 15%; Volatility 10%
b	Expected return: 11.25%; Volatility 9.6%
c	Expected return: 6.25%; Volatility 9.6%
d	Expected return: 15%; Volatility 13%
e	Expected return: 6.25%; Volatility .0092%