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Economy states Probability rABC rRST 1 0.1 22% -2% 2 0.6 12% 12% 3 0.3 2% 30% Which stock has higher risk, ABC or RST?

Economy states

Probability

rABC

rRST

1

0.1

22%

-2%

2

0.6

12%

12%

3

0.3

2%

30%

Which stock has higher risk, ABC or RST? Why?

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