QUESTION 31

1. A stock has the following probability distribution: If the economy is good (the probability is 20%), its expected stock return is 20%; if the economy is on average (the probability is 60%), its expected stock return is 10%; if the economy is bad (the probability is 20%), its expected return is -10%. Find the expected rate of return for the stock.

   		8.0%
   		6.0%
   		10.0%
   		14.0%

QUESTION 32

1. Using the data from Question 31, find the standard deviation for the stock.

   		9.80%
   		10.29%
   		11.35%
   		12.98%