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You are given the following information on two stocks BI and B2. The stock B1 performed well in slowdown as compared to B2. Both the

You are given the following information on two stocks BI and B2. The stock B1 performed well in slowdown as compared to B2. Both the shares are selling at Rs.90 per share. The estimated rupee return of the stock is given as follows:

Economy's Behaviour

High Growth

Low Growth

Stagnation

Recession

Probability

0.45

0.25

0.2

0.1

Return on B1

90

98

106

122

Return on B2

120

104

72

48

Calculate the expected return with formulae (without excel sheet) and risk in the following cases:

1. When you invested 5000 in B1

2. When you invested 5000 in B2

Write down your preferences (10 Marks)

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