Using the following information for McDonovan, Inc.\'s stock, calculate their ex

Question

Using the following information for McDonovan, Inc.'s stock, calculate their expected return and standard deviation.
State Probability Return
Boom 20% 40%
Normal 60% 15%
Recession 20% (20%)

I got this as answer:
23%
45%
20%

Then I got this as an answer:
0.02*0.04+0.15*0.06+0.02*0.02 = 0.21

expected return =21%

Then this answer:
Expexted ret=(0.2)(0.4)+(0.6)(0.15)+(0.2)(0.2)=0.21=21%
sd=E(x^2)-E(x)^2=0.078-0.0441=0.0339
Now I am even more confused than I was in the beginning. Any help would be appreciated. Thanks

Explanation / Answer

Expexted ret=(0.2)(0.4)+(0.6)(0.15)+(0.2)(0.2)=0.21=21% sd=E(x^2)-E(x)^2=0.078-0.0441=0.0339 correct

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