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The expected market return and risk for different assumptions about the state of the economy...

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The expected market return and risk for different assumptions about the state of the economy is shown below. State of Economy Fast growth Slow growth No growth Recession Depression Probability Market Return of State 0.11 0.44 0.27 378 11% 58 -18 0.01 -348 a. Compute the expected return and standard devlation. (Round your answers to 2 decimal places.) 7.68% return Standard b. Compute the expected return and risk for the following 2 scenarios: (Round your answers to 2 decimal places.) Scenario 1 Expected Probabilit of State 0.14 0.28 0.32 0.21 0.05 State of y Market Return 358 Fast growth Slow growth No growth Recession Depression 158 58 -208 -318 retum Standard Scenario 2: State of Probability Market Return Fast growth Slov growth No growth Recession Depression of State . 12 0.35 0.35 0.13 0.05 448 158 28 -21% -33% return Standard deviation

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