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What are the expected returns for Stocks A and B? Expected Return E(R) Stock A Stock B State (i) p(i) Ra Rb Recession 0.25 -20%
What are the expected returns for Stocks A and B?
Expected Return | |||
E(R) | |||
Stock A | Stock B | ||
State (i) | p(i) | Ra | Rb |
Recession | 0.25 | -20% | 30% |
Neutral | 0.50 | 15% | 15% |
Boom | 0.25 | 35% | -10% |
What are the expected returns for Stocks A and B?
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