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Problem 5: Suppose you believe that the return on the stock market during the next year is governed by the following probabilities: Probability Market Return

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Problem 5: Suppose you believe that the return on the stock market during the next year is governed by the following probabilities: Probability Market Return 0.4 20% 0.3 0 0.3 -20 What is the expected (average) return for the next year? What is the level of risk (standard deviation)

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