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Intro We know the following expected returns for stocks A and B, given different states of the economy: State (s) Probability E(ra,s) Erb,s) 0.1 -0.03

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Intro We know the following expected returns for stocks A and B, given different states of the economy: State (s) Probability E(ra,s) Erb,s) 0.1 -0.03 0.05 Recession Normal 0.5 0.12 0.08 Expansion 0.4 0.2 0.12 NB Attempt 1/10 for 10 pts. Part 1 What is the expected return for stock A? 3+ decimals Submit Attempt 1/10 for 10 pts. Part 2 What is the expected return for stock B? 3+ decimals Submit

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