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Use the following information on states of the economy and stock returns to answer the followings: Security Returns If State Occurs State of Economy Probability

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Use the following information on states of the economy and stock returns to answer the followings: Security Returns If State Occurs State of Economy Probability of State of Economy .40 Roll Ross Bust - 10% 21% Boom .60 28 8 Calculate the volatility of a portfolio of 35 percent Roll and 65 percent Ross by filling in the following table: (1) (2) State of Probability of Economy State of Economy Bust Boom Portfolio Return If State Occurs (5) Squared Deviation Product from Expected Return (2) x (4) op

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