Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession E (r) = -1p(s)r (s) Var (r) = o = -1 p (s)[r (s) E (r)] SD (r) = o = Var (r) Required: Use above equations to compute the mean and standard deviation of the HPR on stocks. (Do not Round your answers to 2 decimal places.) Mean Standard deviation % % Probability 0.2 0.4 0.4 4 HPR 40% 16 - 20

Suppose your expectations regarding the stock market are as follows: E(r)=s=1sp(s)r(s)Var(r)2=s=1sp(s)[r(s)E(r)]2SD(r)=Var(r) Required: Use above equations to compute the mean and standard deviation of the HPR on stocks. (Do not Round your answers to 2 decimal places.)