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You've estimated the following expected returns for a stock, depending on the strength of the economy: State(s) Probability Expected Return Recession 0.2 -0.06 Normal 0.5
You've estimated the following expected returns for a stock, depending on the strength of the economy:
State(s) | Probability | Expected Return |
Recession | 0.2 | -0.06 |
Normal | 0.5 | 0.05 |
Expansion | 0.3 | 0.1 |
What is the expected return for the stock?
What is the standard deviation of returns for the stock?
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