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Use the following information to answer the questions below: Security Return(S1) Return(S2) A 16% 20% B 12% 25% Risk-free asset return = 4% S1 is
- Use the following information to answer the questions below:
Security Return(S1) Return(S2)
A 16% 20%
B 12% 25%
Risk-free asset return = 4%
S1 is State-1 and S2 is State-2;
Prob(S1) = 0.6; Prob(S2) = 0.4
i). What is the expected return on Security A and the expected return on Security B?
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