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Suppose your expectations regarding the stock price are as follows: State of the Market Probability Ending Price HPR (including dividends) Boom 0.28 $ 140 53.5
Suppose your expectations regarding the stock price are as follows:
State of the Market | Probability | Ending Price | HPR (including dividends) | |||||||||
Boom | 0.28 | $ | 140 | 53.5 | % | |||||||
Normal growth | 0.23 | 110 | 20.0 | |||||||||
Recession | 0.49 | 80 | 17.0 | |||||||||
Use the equations E(r)=sp(s)r(s)E(r)=sp(s)r(s) and 2=sp(s)[r(s)E(r)]22=sp(s)[r(s)E(r)]2 to compute the mean and standard deviation of the HPR on
MEAN: ? %
Standard Deviation: ? %
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