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4. Consider the following information: State of Economy Probability of state of Economy Recession 0.70 E (R) Stock A E (R) Stock B 0.15 -0.30

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4. Consider the following information: State of Economy Probability of state of Economy Recession 0.70 E (R) Stock A E (R) Stock B 0.15 -0.30 Boom 0.30 0.20 0.18 Calculate the expected return and the variance of a portfolio invested 60 percent each in stock A and 40 percent in stock B

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