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Suppose your expectations regarding the stock market are as follows: State of the Economy Probability Boom 0.4 Normal growth 0.3 Recession 0.3 HPR 32% 20
Suppose your expectations regarding the stock market are as follows: State of the Economy Probability Boom 0.4 Normal growth 0.3 Recession 0.3 HPR 32% 20 -16 E() = Por(s) S=1 Var(w) = 72 = [r(s) E(P S=1 SD(r) = q = V Var(r) Use above equations to compute the mean and standard deviation of the HPR on stocks. (Do not round intermediate calculations. Round your answers to 2 decimal places.) % Mean Standard deviation %
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