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Q18. Use the following scenario analysis for Stocks X and Y to answer problems. Bull Market Bear Market Normal Market 0.3 Probability 0.2 0.5 Stock
Q18. Use the following scenario analysis for Stocks X and Y to answer problems. Bull Market Bear Market Normal Market 0.3 Probability 0.2 0.5 Stock X -20% 18% 50% Stock Y 20% -15% 10% a) What are the standard deviations of returns on Stocks X and Y? b) Assume that of your $10,000 portfolio, you invest $9,000 in Stock X and $1,000 in Stock Y. What is the expected return on your portfolio
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