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Consider the table below and answer the preceding questions State of economy Return on stock A Return on stock B Probability of return Recession 5%
Consider the table below and answer the preceding questions
State of economy
Return on stock A
Return on stock B
Probability of return
Recession
5%
-1%
0.3
Normal
10%
5%
0.5
Prosperity
15%
20%
0.4
Calculate
A. The expected return of stock A and B
B. The standard deviation of stock a and B
C. Coefficient of variation of stock A and B
D. Which stock is risky?
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