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roms An investment bank is constructing a portfolio containing two types of stocks related to two companies listed on the Nikkei 225 index: Seiko Epson

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roms An investment bank is constructing a portfolio containing two types of stocks related to two companies listed on the Nikkei 225 index: Seiko Epson Corp. (SEC) from the Electric Machinery industry and Mitsubishi Estate Co, Itd. (MEC) from the Real Estate industry. The table below provides the expected annual returns and corresponding probabilities with respect to different states of the economy. Seiko Epson Corp. (SEC) Return Probability Mitsubishi Estate Co, Itd. (MEC) Return Probability State of the economy Recession Recovery Expansion Boom 0.1 0.4 -8% 4% 9% 18% -5% 6% 8% 12% 0.1 0.4 0.3 0.2 0.3 0.2 roms An investment bank is constructing a portfolio containing two types of stocks related to two companies listed on the Nikkei 225 index: Seiko Epson Corp. (SEC) from the Electric Machinery industry and Mitsubishi Estate Co, Itd. (MEC) from the Real Estate industry. The table below provides the expected annual returns and corresponding probabilities with respect to different states of the economy. Seiko Epson Corp. (SEC) Return Probability Mitsubishi Estate Co, Itd. (MEC) Return Probability State of the economy Recession Recovery Expansion Boom 0.1 0.4 -8% 4% 9% 18% -5% 6% 8% 12% 0.1 0.4 0.3 0.2 0.3 0.2

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