You are a financial analyst, and you are tasked with calculating the expected return and standard deviation of returns for Kershaw Enterprises. Toward that end, you are given the following data:
$\bullet$In an expanding economy, Kershaw is expected to earn 5.30%;
$\bullet$In a booming economy, Kershaw is expected to earn 9.50%;
$\bullet$In a contracting economy, Kershaw is expected to earn 3.50%;
$\bullet$In a recession, Kershaw is expected to earn ?1.20%;
$\bullet$The probabilities for expansion, boom, contraction and recession are 20%, 25%, 35% and 20% respectively.

Question

Quizplus · Accepted Answer

The Answer of You are a financial analyst, and you are tasked with calculating the expected return and standard deviation of returns for Kershaw Enterprises. Toward that end, you are given the following data:
$\bullet$In an expanding economy, Kershaw is expected to earn 5.30%;
$\bullet$In a booming economy, Kershaw is expected to earn 9.50%;
$\bullet$In a contracting economy, Kershaw is expected to earn 3.50%;
$\bullet$In a recession, Kershaw is expected to earn ?1.20%;
$\bullet$The probabilities for expansion, boom, contraction and recession are 20%, 25%, 35% and 20% respectively.

You Are a Financial Analyst, and You Are Tasked with Calculating