Question

Suppose your expectations regarding the stock market are as follows: State of the Economy Probability HPR...

Suppose your expectations regarding the stock market are as follows:

State of the Economy Probability HPR
Boom 0.3 44%
Normal growth 0.6 22
Recession 0.1 -15


Use above equations to compute the mean and standard deviation of the HPR on stocks. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

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