Use the following information to answer the next three
questions
Scenario 
Probability 
Return on Value Stock Fund 
Return on Income Stock Fund 
Recession 
0.25 
14% 
12% 
Normal Growth 
0.25 
17% 
6% 
Boom 
0.50 
33% 
5% 
Expected Return 
1.00% 

Standard Deviation 
7.52% 
What is the expected return on Value Stock Funds?
16.25% 

15.45% 

17.25% 

18.25% 
What is the standard deviation of Value Stock Funds?
14.25% 

19.19% 

16.19% 

22.25% 
What is the expected return if you invested 80% in value stock funds and 20% in income stock funds?
12.25% 

14.50% 

12.00% 

14.00% 
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