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An asset can earn 5%, 10%, 15%, or 20%, all equally likely. (a) Calculate the expected return and standard deviation using this probability distribution (show
An asset can earn 5%, 10%, 15%, or 20%, all equally likely. (a) Calculate the expected return and standard deviation using this probability distribution (show work by hand with the appropriate formulas). (b) Suppose over a 4-year period, each possible return was earned exactly one year. Calculate the arithmetic and geometric average returns, and the estimated standard deviation.
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