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Assume that the economy has an 4 0 % chance of booming, a 3 8 % chance of being normal, and being recessionary the remainder
Assume that the economy has an chance of booming, a chance of being normal, and being recessionary the remainder of the time. A stock is expected to return in a boom economy, in a normal economy, and in a recession economy. What is the standard deviation of returns on the stock?
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