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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
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
Normal
Recession
a What is the probability of a recession? Round your answer to decimal places.
b Calculate the expected return for Stock A and Stock BRound your answers to decimal places.
c Calculate the expected return for a portfolio that is invested in A and in BRound your answer to decimal places.
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