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There are two stocks in the market. The common price for the first stock is 200 dollars. Five different states are expected: extreme risk 10%
There are two stocks in the market. The common price for the first stock is 200 dollars. Five different states are expected: extreme risk 10% high risk 20%, medium risk with 30%, low risk 30%, and safest mode with 10% probabilities.The expected future prices for each state are 300, 260, 225, 180, and 110 dollars. The expected dividends are 5, 3, 1, -1, and -4 dollars. Calculate the expected return and standard deviation over all contingencies.
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