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Use the following table to answer A and B State Prob j R 1 (%) R 2 Boom 1/5 15 18 Average 2/5 6 8
Use the following table to answer A and B
| State | Probj | R1 (%) | R2 |
|---|---|---|---|
| Boom | 1/5 | 15 | 18 |
| Average | 2/5 | 6 | 8 |
| Bad | 1/5 | -1 | -6 |
| Recess | 1/5 | -6 | -8 |
a. Find E(R1) and E(R2)
b. Find E[(R1 - E(R1))*(R2 - 4)]
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FINA 6201 Financial Theory And Policy Emery Trahan
Authors: Emery Trahan
1st Edition
1609270754
