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3.(40 points) You have a two stock portfolio with $300 in stock A and $700 in stock B. You believe the following probability distribution exists

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3.(40 points) You have a two stock portfolio with $300 in stock A and $700 in stock B. You believe the following probability distribution exists for your stocks. Portfolio Return State of Probability Market Rate Market Rate the of State of Return of of Return of Economy Occurring Stock A Stock B 0.3 -20% 25% Normal 0.5 10% 15% Recession 0.2 20% 10% Boom a.Calculate expected rate of return, risk, and CV of stock A. b.Calculate portfolio expected rate of return, portfolio risk, and portfolio CV. Note: Expected rate of return, risk, and CV of stock B are 16, 7, and 0.44, respectively

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