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Q1) There is a 46.80% probability of a below average economy and a 53.20% probability of an average economy. If there is a below average
Q1) There is a 46.80% probability of a below average economy and a 53.20% probability of an average economy. If there is a below average economy stocks A and B will have returns of -10.00% and 4.40%, respectively. If there is an average economy stocks A and B will have returns of 15.40% and -2.40%, respectively. Compute the: a) Expected Return for Stock A (0.75 points): |
b) Expected Return for Stock B (0.75 points): |
c) Standard Deviation for Stock A (0.75 points): |
d) Standard Deviation for Stock B (0.75 points): |
For the final answers, round your answer to the nearest 4 decimal places (3 decimals for the reward-to-risk ratio and 2 for the beta-coefficient). If you need to use a calculated number for further calculations, DO NOT round until after all calculations have been completed. |
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