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There are two stocks in the market, stock A and stock B . The price of stock A today is $ 7 4 . The
There are two stocks in the market, stock A and stock B The price of stock A today is $ The price of stock A next year will be $ if the economy is in a recession, $ if the economy is normal, and $ if the economy is expanding. The probabilities of recession, normal times, and expansion are and respectively. Stock A pays no dividends and has a beta of Stock B has an expected return of a standard deviation of a beta of and a correlation with stock A of The market portfolio has a standard deviation of Assume the CAPM holds. a What are the expected return and standard deviation of stock ADo not round intermediate calculations. Round the final answers to decimal places. tableStock,Expected return,
There are two stocks in the market, stock A and stock B The price of stock A today is $ The price of stock A next year will be $ if the economy is in a recession, $ if the economy is normal, and $ if the economy is expanding. The probabilities of recession, normal times, and expansion are and respectively. Stock A pays no dividends and has a beta of Stock B has an expected return of a standard deviation of a beta of and a correlation with stock A of The market portfolio has a standard deviation of Assume the CAPM holds.
a What are the expected return and standard deviation of stock ADo not round intermediate calculations. Round the final answers to decimal places.
tableStock,Expected return,
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