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You are trying to develop a strategy for investing in two different stocks. The anticipated annual return for a $1,000 investment in each stock under

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You are trying to develop a strategy for investing in two different stocks. The anticipated annual return for a $1,000 investment in each stock under four different economic conditions has the following probability distribution: Probability Economic condition Stock X return Stock Y return Recession (100) 50 Slow growth 150 Moderate growth (20) 0.3 Fast growth 150 (100) 0.1 0.3 0.3 0 80 Required: a. Compute the expected return for stock X and for stock Y. (8 pts) b. Compute the standard deviation for stock X and for stock Y. (8 pts) c. Would you invest in stock X or stock Y? Explain your answer. (4pts)

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