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State of Economy Probability of State of Economy Rate of return if State Occurs Stock A Stock B Recession .20 .05 -.20 Normal .57 .08

State of Economy Probability of State of Economy Rate of return if State Occurs

Stock A Stock B

Recession .20 .05 -.20

Normal .57 .08 .09

Boom .23 .13 .26

Calculate expected return for A and B

Calculate the standard deviation for stock A and B

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