Question: The probability that the economy will contract is 0.2. The probability of moderate growth is 0.6, and the probability of a rapid expansion is 0.2. If the economy contracts, you can expect a return on your portfolio of 5%. With moderate growth, your return will be 8%. If there is a rapid expansion, your portfolio will return 15%.

a) What is your expected return?

b) What is the standard deviation of the return?