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Portfolio Stock X 70.00% x p(i) State (0) Boom Normal Recession w(j) p(i) 0.15 0.65 0.2 Stock Y 30.00% Expected Return 20.0% 8.0% -6.0% 29.0%

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Portfolio Stock X 70.00% x p(i) State (0) Boom Normal Recession w(j) p(i) 0.15 0.65 0.2 Stock Y 30.00% Expected Return 20.0% 8.0% -6.0% 29.0% 11.0% -17.0% Expected Return Portfolio State (0) p(i) Expected Return Deviation from Expected Return Deviaton^2 x p() Boom Normal Recession 0.15 0.65 0.2 Variance Standard Deviation

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