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Hull Consultants, a famous think tank in the Midwest, has provided probability estimates for the four potential economic states for the coming year. The probability

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Hull Consultants, a famous think tank in the Midwest, has provided probability estimates for the four potential economic states for the coming year. The probability of a boom economy is 10%, the probability of a stable growth economy is 15%, the probability of a stagnant economy is 50%, and the probability of a recession is 25%. Use the table below to compute the following three questions: Estimate the expected returns on stock in percentage for the coming year. Using the data from the previous problem, calculate the variance of stock (in decimal). QUESTION 17 Using the data from the previous problem, calculate the standard deviation of stock, in percentage. QUESTION 18 Using the data from the previous problem, calculate the variance of corporate bond (in decimal). QUESTION 19 Using the data from the previous problem, calculate the standard deviation of corporate bond, in percentage Using the data from the previous problem, calculate the variance of Government bond (in decimaf). QUESTION 21 Using the data from the previous problem, calculate the standard deviation of Government bond, in percentage. QUESTION 22 With respect to the data from the previous problem, if the estimates for both the probabilities of the economy and the retums in aach state of the economy are correct, which investment would you choose, considering both risk and return? Stock Corporate Bond Government Bond

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