Calculating Returns and Standard Deviations. Based on the following information, calculate the expected return and standard deviation for the two stocks.

Return 0.02 Stock A Recession Normal Boom Probability 0.10 0.50 0.40 Return Deviation (0.0920) (0.0120) 0.0380 Product 0.0020 0.0500 0.0600 10.1120 Squared Deviation 0.00846 0.00014 0.00144 Variance = 0.10 Product 0.0008464 0.000072 0.0005776 0.00150 0.15 E(R) Standard Deviation Stock B Recession Normal Boom Probability 0.10 0.50 0.40 Return (0.30) 0.18 0.31 E(R) Product (0.0300) 0.0900 0.1240 0.1840 Return Deviation (0.4840) (0.0040) 0.1260 Squared Deviation Product 0.23426 0.0234256 0.000028E-06 0.01588 0.0063504 Variance = 0.02978 Standard Deviation