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Question 1 a. Calculate the expected return on stock of Gamma Inc.: State of the economy Probability of the states Percentage returns Economic recession 28%
Question 1
a.
Calculate the expected return on stock of Gamma Inc.:
State of the economy | Probability of the states | Percentage returns |
---|---|---|
Economic recession | 28% | -7.4% |
Steady economic growth | 35% | 2.2% |
Boom | Please calculate it | 14.6% |
Round the answers to two decimal places in percentage form.
b.
Calculate the expected standard deviation on stock:
State of the economy | Probability of the states | Percentage returns | |
---|---|---|---|
Economic recession | 18% | 2% | |
Steady economic growth | 22% | 8% | |
Boom | Please calculate it | 14% |
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