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Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession HPR 32% Probability 0.4 0.3 0.3 20
Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession HPR 32% Probability 0.4 0.3 0.3 20 -16 S E(r) = P(s)r(s) s=1 Var(-) = 02 - POLFC) E(1) SD(-) = 0 = 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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