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Consider the following table for Stocks A and B EconomyProbability of ReturnReturn on AReturn on BGood 20%15%20% Normal 50%10%8% Bad 30%5%-10% Calculate the following and
Consider the following table for Stocks A and B
EconomyProbability of ReturnReturn on AReturn on BGood20%15%20%Normal50%10%8%Bad30%5%-10%
Calculate the following and show calculations/calculator keys
a. Expected return, Standard Deviation, and Coefficient of Variation of Stock A
b. Expected return, Standard Deviation, and Coefficient of Variation of Stock B
c. Which stock is better A or B and why?
d. Expected Return on Portfolio (70% in stock A and 30% in Stock B)
e. Standard Deviation of Portfolio (70% in stock A and 30% in Stock B)
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