You are trying to develop a strategy for investing in two different stocks. The anticipated annual return for a
$1,000 investment in each stock under four different economic conditions has the probability distribution shown
to the right. Complete parts (a) through (c) below.
a. Compute the expected return for stock X and for stock Y.
The expected return for stock X is
(Type an integer or a decimal. Do naround.)
Economic
ProbabilityCondition
0.1
0.3
0.4
0.2
Recession
Slow growth
Moderate growth
Fast growth
Returns
Stock X Stock Y
-110 - 160
30 50
90 140
170 190