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Suppose the current price of stock A is $10/share and your expectation regarding the stock market at the end of the year are as follows:

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Suppose the current price of stock A is $10/share and your expectation regarding the stock market at the end of the year are as follows: State of the Economy Likelihood Dividend 0.3 Stock Price $12 $11 Boom Normal $0.5/share 0.4 None (S0/share) None (50/share) Recession 0.3 $8 1) What is the expected return of this stock? (5 credits) 2) What is the standard deviation of return? (5 credits)

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