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Question 5 There is a 1 5 . 4 0 % probability of a below average economy and a 8 4 . 6 0 %

Question 5
There is a 15.40% probability of a below average economy and a 84.60% probability of an average economy.
If there is a below average economy stocks A and B will have returns of -7.90% and 16.20%, respectively. If
there is an average economy stocks A and B will have returns of 15.90% and -3.50%, respectively. Compute
the:
A. Expected Return for Stock A:
B. Expected Return for Stock B:
C. Standard Deviation for Stock A:
D. Standard Deviation for Stock B:
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