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An analyst has predicted the following returns for Stock A and Stock B in three possible states of the economy. State Probability A B

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An analyst has predicted the following returns for Stock A and Stock B in three possible states of the economy. State Probability A B Boom 0.25 0.24 0.27 Normal 0.49 0.16 0.20 Recession ? 0.10 0.17 a. What is the probability of a recession? (Round your answer to 2 decimal places.) Probability b. Calculate the expected return for Stock A and Stock B. (Round your answers to 2 decimal places.) Stocks A Stocks B Expected Return % % c. Calculate the expected return for a portfollo that is invested 42% In A and 58% in B. (Round your answer to 2 decimal places.)

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