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Suppose your expectations regarding the stock price are as follows: State of the Market Boom Normal growth Recession Probability 0.30 0.22 0.48 Ending Price $
Suppose your expectations regarding the stock price are as follows: State of the Market Boom Normal growth Recession Probability 0.30 0.22 0.48 Ending Price $ 140 110 80 HPR (including dividends) 55.5% 15.5 -14.0 = = - Use the equations E(r) = Ep (s) r(s) and o2 = Ep (s) [r(s) E(r)]? to compute the mean and standard deviation of the HPR on stocks. (Do not round intermediate calculations. Round your answers to 2 decimal places.) S S Mean % Standard deviation %
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