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Suppose your expectations regarding the stock market are as follows: State of the Economy Probability Boom 0.2 Normal growth 0.3 Recession 0.5 HPR 34% 19

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Suppose your expectations regarding the stock market are as follows: State of the Economy Probability Boom 0.2 Normal growth 0.3 Recession 0.5 HPR 34% 19 -14 E(v) = PCD76 ) = p(s) r(5) s=1 Var(-) = 02 = P()[r() E() =1 SD(r) = 0 = VVar(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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