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Suppose your expectations regarding the stock market are as follows: State of the Economy Probability Boom 0.4 Normal growth 0.4 Recession 0.2 HPR 41% 15
Suppose your expectations regarding the stock market are as follows: State of the Economy Probability Boom 0.4 Normal growth 0.4 Recession 0.2 HPR 41% 15 -19 E() = P(s)r(s) S=1 Var(p) = 92 = PO[r(s) E(-) SD(r) = g = VVar(7) 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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