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How do I get these answers? I believe the 10% expected return comes from the average of stock A correct? 42. Consider the following stock
How do I get these answers? I believe the 10% expected return comes from the average of stock A correct?
42. Consider the following stock return scenarios for three stocks: Economy Stock A Stock B Up 16% 35% Average 10% 1196 Down 4% -25% Stock C 2% 6% 12% If each state of the economy is equally likely, calculate the expected return and population standard deviation for a portfolio invested entirely in Stock A. Which stock should be added to the portfolio to reduce risk? Answer: 10%, 4.90%; add Stock CStep by Step Solution
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