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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 0.4 0.3 HPR 44% 14
Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession Probability 0.3 0.4 0.3 HPR 44% 14 - 16 S E(r) = P(s) r(s) sa1 S Var(t) = g? = P()[r(s) E(r)? s=1 SD(r) = q = V Var(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 14.00% %
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