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QUESTION 4 The following are possible states of the economy and the returns associated with stocks A and B in those states State Probability Return
QUESTION 4 The following are possible states of the economy and the returns associated with stocks A and B in those states State Probability Return on A Return on B Good 0.25 24% 30% Normal 0.4 36% 189 Bad 0.35 48% -6% Calculate the expected return and the standard deviation of a portfolio comprised of stocks A and B. The weight in stock A ls 40%
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