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Expected rate of return and standard deviation of returns

You are considering investing in a project with the following possible outcomes:

Probability of Investment
States Occurrence Returns

State 1: Economic boom 15% 16%
State 2: Economic growth 45% 12%
State 3: Economic decline 25% 5%
State 4: Depression 15% -5%

Calculate the expected rate of return and standard deviation of returns for this investment.

a.    9.8%, 7.0%
b.    7.0%, 43.6%
c.    8.3%, 6.6%
d.    8.3%, 16.1%

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Finance Basics: Expected rate of return and standard deviation of returns

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