Problem 10-18 Expected Return Risk (LG10-1) Following are three economic states, their likelihoods, and the potential returns: Economic State Fast growth Slow growth Recession Probability 0.26 0.37 0.37 Return 27% 9 -17 Determine the standard deviation of the expected return. (Do not round intermediate calculations and round your answer to 2 decimal places.) Standard deviation % Problem 10-20 Under-/Overvalued Stock (LG10-3) A manager believes his firm will earn a return of 14.00 percent next year. His firm has a beta of 1.36, the expected return on the market is 12.00 percent, and the risk-free rate is 6.00 percent. Compute the return the firm should earn given its level of risk. (Round your answer to 2 decimal places.) Required return % Determine whether the manager is saying the firm is undervalued or overvalued. O overvalued O undervalued