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You have predicted the following returns for stocks A and B in three possible states of nature What is expected return for stock A? State

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You have predicted the following returns for stocks A and B in three possible states of nature What is expected return for stock A? State Probability A Boom 01 0.20 0.30 Normal 0.4 0.10 0.20 Recesion 0.5 0.05 0.07 Select one: a 95% b. 8.7% 10.5% d. 8.5%

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