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Question (5 Marks). CLO4 A financial analyst is concerned about the implications of COVID-19 on the returns from a particular stock. The gnalyst believes that
Question (5 Marks). CLO4 A financial analyst is concerned about the implications of COVID-19 on the returns from a particular stock. The gnalyst believes that There is a 50% chance that the COVID-19 situation will remain unchanged next year and in this case the return will be 12% In the same time, it is equally likely that the situation will get worse producing a negative return of -18%, or better producing a high return of 30%. Evaluate the value of the stock: [2] A] expected rate of return. B) standard deviation. [3] Heading 4
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