STATS PROBABILTY QUESTION

You are considering two mutual funds for your investment. The possible returns for the funds are dependent on the state of the economy and are given in the accompanying table.

State of the Economy
Fund A Fund B
Good 20% 40%
Fair 10% 20%
Poor -10% -40%


You believe that the likelihood is 20% that the economy will be good, 50% that it will be fair, and 30% that it will be poor.

The expected return for Fund A is ; the standard deviation of Fund A return is ;

The expected return for Fund B is ; the standard deviation of Fund B return is