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Question 2 Consider the following information: State of the Probability of Return on A Return on B economy state of economy (%) (%) Boom 0.2

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Question 2

Consider the following information:

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State of the Probability of Return on A Return on B economy state of economy (%) (%) Boom 0.2 10 5 Growth 0.3 -2 0 Normal 0.3 2 15 Recession 0.2 15 20

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