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The following returns are predicted for ABC stock under three projected economic scenarios. Pi = Probability of economic scenario i. Ri = Return of ABC

The following returns are predicted for ABC stock under three projected economic scenarios. Pi = Probability of economic scenario i. Ri = Return of ABC stock in the economic scenario i. Pi Ri Boom 0.35 14% Normal 0.35 8% Recession 0.3 -2% What is the standard deviations of returns? 7.42% 7.64% 4.97% 6.46%

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