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Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession Probability 0.4 0.5 0.1 HPR 38% 17

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Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession Probability 0.4 0.5 0.1 HPR 38% 17 -10 E(r) = p(s)") S Var(r) o2 = p()[r(s) E(r) s=1 SD(r) = = 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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