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A stock is expected to return 20% in a booming economy. 7.50% in a normal economy and -25% in a recession. THe probability of a
A stock is expected to return 20% in a booming economy. 7.50% in a normal economy and -25% in a recession. THe probability of a booming economy is 20% while the probability of a normal economy is 60% and the probability of a recession is 20% What is the expected high and low range of returns when computing 1 standard deviation?
Answers:
1.) 3.50%, 15.05%
2.) 0%, 3.50%
3.) 1.24%, 5.77%
4.) -29.67%, 36.67%
5.) -11.55%, 18.55%
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