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Find what are the expected return and standard deviation

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Reference no: EM133010416

Problem 1: Suppose you invest 50% of your fund in a stock. A and the other 50% in stock B. If stock A and B are expected to have the follwing returns next year, then what are the expected return and standard deviation for the portfolio

State of economy          Probabilitly            Stock A            Stock B

Recession                           - 2                    2%             -20%
Boom                                  -8                   15%                25%

Reference no: EM133010416

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