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3. There are three economy situations and two stocks. Information is as follows. Assume you have %10,000 and allocate $4,000 on stock A. Economy
3. There are three economy situations and two stocks. Information is as follows. Assume you have %10,000 and allocate $4,000 on stock A. Economy Stock A Stock B Booming 0.2 10% 20% Neutral ? 5% 0% Recession 0.5 0% -10% (Answer format: keep 1 digit after decimal point in %. For example, 1.56% -> 1.6%) a. What are the expected returns for both stock A , respectively? and B b. What is the standard deviation/ risk for stock A? c. What is the expected portfolio? d. What is the portfolio return when economy is booming?
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