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There is a 30 percent probability the economy will boom; otherwise, it will be normal. Stock Q is expected to return 18 percent in a
There is a 30 percent probability the economy will boom; otherwise, it will be normal. Stock Q is expected to return 18 percent in a boom and 9 percent otherwise. Stock R is expected to return 9 percent in a boom and 5 percent otherwise. What is the expected return and standard deviation of a portfolio that is invested 40 percent in Stock Q and 60 percent in Stock R?
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