Problem:
State of Economy - Probability - Smith Stores Returns
Depression .05 -50%
Recession .10 -15%
Mild Slowdown .20 5%
Normal .30 15%
Broad Expansion .20 25%
Strong Expansion .15 40%
Question 1. The variance and standard deviation of the Smith Stores returns are:
(A) 428.75; 20.71
(B) 71.46; 8.45
(C) 939.58; 30.65
(D) 1127.50; 33.58
Question 2. The expected return on Smith Stores is:
(A) 20.5
(B) 12.5
(C) 8.5
(D) 3.3