What is the expected return of each asset

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Question - An equity analyst has projected the expected returns on the shares of three publically traded corporations, Wassy Inc., Mappa Corp, and Fansa Ltd under four different economic conditions. The probabilities of each economic state were determined by the Central Bank and are shown below:

State of Economy

Probability of State

Return on WASSY in State

Return on MAPPA in State

Return on FANSA in State

Boom

.25

0.050

0.240

0.300

Stagnant

.35

0.050

0.040

0.060

Recession

.40

0.050

-0.100

-0.200

Using the information in the above table answer the following questions:

a. What is the expected return of each asset?

b. What is the variance and standard deviation of each asset?

Reference no: EM133074531

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