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Suppose your expectations regarding the stock market are as follows: State of the Economy Probability HPR Boom Normal growth Recession 0.2 0.5 0.3 37% 17

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Suppose your expectations regarding the stock market are as follows: State of the Economy Probability HPR Boom Normal growth Recession 0.2 0.5 0.3 37% 17 E(r) p(s)r(s) Var(r) = y p(s)[r(s)-E(r)]2 Use above equations to compute the mean and standard deviation of the HPR on stocks. (Do not round calculations. Round your answers to 2 decimal places.) Mean Standard deviation 1%

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