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For the final answers, round your answer to the nearest 4 decimal places ( 3 decimals for the rewardto-risk ratio and 2 for the beta-coefficient).
For the final answers, round your answer to the nearest 4 decimal places ( 3 decimals for the rewardto-risk ratio and 2 for the beta-coefficient). If you need to use a calculated number for further calculations, DO NOT round until after all calculations have been completed. Points as marked (10 Points Total) Q1) There is a 42.50% probability of a below average economy and a 57.50% probability of an average economy. If there is a below average economy stocks A and B will have retums of 0.60% and 19.20%, respectively. If there is an average economy stocks A and B will have retums of 8.70% and 3.90%, respectively. Compute the: a) Expected Retum for Stock A ( 0.75 points): b) Expected Retum for Stock B ( 0.75 points): c) Standard Deviation for Stock A ( 0.75 points): d) Standard Deviation for Stock B ( 0.75 points)
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