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Find Ret stocks Economic Outcome Probability 1. Recession P1 = 20 Return Stock A Stock B R1 = .01 R = .02 2. Recovery P2

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Find Ret stocks Economic Outcome Probability 1. Recession P1 = 20 Return Stock A Stock B R1 = .01 R = .02 2. Recovery P2 = ,50 R = .10 R2 = .04 3. Growth P = .30 R = 12 R = .08 8.8% Expected Return (R)

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