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Use the following expectations about the stock market for the next 2 questions. State of the Economy Boom Normal growth Recession Probability 0.30 0.40 0.30

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Use the following expectations about the stock market for the next 2 questions. State of the Economy Boom Normal growth Recession Probability 0.30 0.40 0.30 HPR 44% 14 - 16 What is the expected return, E(R), and standard deviation, S.D., for stocks? O E(R)= 17.33%. S.D.-17.33% O E(R)= 14.00%, S.D.-23.2496 O E(R)-14.00%.S.D.-21.2196 O E(R)=17.33%, S.D.-14% Assume you have a $10,000 portfolio with $9.000 in stocks and $1,000 in T-bills that return 4%. What is the expected return and standard of your portfolio? O E(R)-16.0096, S.D.-23.2496 E(R)- 16.00%. S.D.-16.00% O E(R)- 13.0096.S.D.-20.9296 E(R)-13.00%.S.D.-19.0996

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