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Suppose your expectations regarding the stock market are as follows: State of the Economy Probability Boom 0.3 Normal growth 0.3 Recession 0.4 HPR 398 21

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Suppose your expectations regarding the stock market are as follows: State of the Economy Probability Boom 0.3 Normal growth 0.3 Recession 0.4 HPR 398 21 -18 E(-) = (s)r(s ) - Var(r) = 72 = PO[PC) ) - E(1) s=1 SD(r) = = VVar() 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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