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State of the Market Probabilty Ending Price HPR (Including Dividens) Boom 0.30 140 47.5% Normal Growth 0.22 110 16.0 Recession 0.48 80 -14.5 Suppose your

State of the Market Probabilty Ending Price HPR (Including Dividens)
Boom 0.30 140 47.5%
Normal Growth 0.22 110 16.0
Recession 0.48 80 -14.5

Suppose your expectations regarding the stock price are as follows:

Use the equations E(r)=sp(s)r(s)E(r)=sp(s)r(s) and 2=sp(s)[r(s)E(r)]22=sp(s)[r(s)E(r)]2 to compute the mean and standard deviation of the HPR on stocks. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

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