=+8 The returns on shares S and T vary depending on the state of economic growth. State

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=+8 The returns on shares S and T vary depending on the state of economic growth.

State of economy Probability of Returns on S if Returns on T if economic state economic state economic state occurring occurs (%)

occurs (%)

Boom 0.15 45 18 Growth 0.70 20 17 Recession 0.15

-10 16 Required Calculate the expected return and standard deviation for share S.

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