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Given the probability distribution for the holding period return for 2 stocks: State of the economy Probability IBM HPR MSFT HPR Boom .35 30% -22%

Given the probability distribution for the holding period return for 2 stocks:

State of the economy	Probability	IBM HPR	MSFT HPR
Boom	.35	30%	-22%
Normal	X	8%	1%
Recession	0.22	5%	18%

What is the probability of a normal state of the economy? What is the expected holding-period return for IBM's stock? For MSFT? ? What is the expected standard deviation of IBM stock? of MSFT? What is the correlation between the two stocks?

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