The expected value and the standard deviation of returns for asset A is
Possible Outcomes Probabilities Returns(%)
Pessimistic .25 10
Most Likely .45 12
Optimistic .30 16
A) 12.7 percent and 2.3 percent
B) 12 percent and 4 percent
C) 12.7 percent and 4 percent
D) 12 percent and 2.3 percent.
This solution illustrates how to find the expected return value and standard deviation of the expected return value given probabilities.