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Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession Probability 0.3 0.6 0.1 HPR 44% 22
Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession Probability 0.3 0.6 0.1 HPR 44% 22 - 15 S E(1) p(s) r() s=1 Var(r) = q2 = p)[r(s) E(r)]2 92 p
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