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Suppose your expectations regarding the stock price fare as follows: State of the Market Probability Ending Price HPR (including dividends) Boom Normal growth Recession .22

Suppose your expectations regarding the stock price fare as follows: State of the Market Probability Ending Price HPR (including dividends) Boom Normal growth Recession .22 .30 .48 $140 110 80 52.5% 18.5 - 17.5 a- Compute the mean and standard deviation of the HPR on stocks. b- Assume risk free rate is 3%. Calculate the expected return and standard deviation of a complete portfolio invested 65% in risky asset

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