Questions and Problems 1. Expected Returns (LO1, CFA1) Use the following information on states of the...
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Questions and Problems 1. Expected Returns (LO1, CFA1) Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone: State of Economy Recession Normal Boom Probability of State of Economy .25 .50 .25 Security Return if State Occurs -8% 13 23 2. Standard Deviations (LO1, CFA2) Using the information in Question 1, calculate the standard deviation of returns. 3. Expected Returns and Deviations (LO1, CFA2) Repeat Questions 1 and 2 assuming that all three states are equally likely. Questions and Problems 1. Expected Returns (LO1, CFA1) Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone: State of Economy Recession Normal Boom Probability of State of Economy .25 .50 .25 Security Return if State Occurs -8% 13 23 2. Standard Deviations (LO1, CFA2) Using the information in Question 1, calculate the standard deviation of returns. 3. Expected Returns and Deviations (LO1, CFA2) Repeat Questions 1 and 2 assuming that all three states are equally likely.
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