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Consider the Following: Rate of Return if State Occurs State of Probability of Economy State of Economy Stock A Stock B Recession 0.10 0.04 0.17

Consider the Following:

Rate of Return if State Occurs

State of

Probability of

Economy

State of Economy

Stock A

Stock B

Recession

0.10

0.04

0.17

Normal

0.60

0.09

0.12

Boom

0.30

0.17

0.27

Calculate the expected return for Stocks A and B.

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