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Sherif will invest in a company stock that is expected to generate the following returns given a particular state of the economy: State of Economy
Sherif will invest in a company stock that is expected to generate the following returns given a particular state of the economy: State of Economy Probability Expected Return Boom 0.15 15% Average Economy 0.5 10% Recession ? 5% a) Calculate expected values for return and risk for Sherif's investment. b) Who is better off Sherif or Shereen, assuming that Shereen invested in another stock that is expected to give a value of return of 10% and risk of 4.2%? Why?
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