We know the following expected returns for stocks A and $B,$ given different states

of the economy:

Part $1$

What is the expected return for stock A$?$

Correct $$

The expected return is the weighted average return across all states of the

economy:

$E(r_A)={\displaystyle \underset{s}{\overset{?}{}}}(p_{s}E(r_{A,s}))$

$=0\mathrm{.}1*(-0\mathrm{.}04)+0\mathrm{.}5*0\mathrm{.}11+0\mathrm{.}4*0\mathrm{.}19$

$=0\mathrm{.}127$

Part $2$

What is the expected return for stock $B?$