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Suppose that you are considering investing in two stocks A and B. After analyzing the two stocks you think that there are three possible states
Suppose that you are considering investing in two stocks A and B. After analyzing the two stocks you think that there are three possible states for the economy over the next year. The economic states and the probabilities, as well as the rates of return on the two securities in each state are as follows: Probability Return of Stock A Return of Stock B 30% 40% 30% 20% 10% -5% 2% 4% 6% (Keep all the numerical answers to 4 decimal places, e.g. xx.1234.)
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