We know the following expected returns for stock A and the market portfolio, given different states of the economy State (s) Probability E(rAs) E(Ms) Recession 0 3 0 02 0 02 Normal 0 5 0 13 0 05 Expansion 0 2 0 21 0 09 The risk free rate is 0 02 Part 1 Assuming the CAPM holds, what is the beta for...

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Understanding Basic Statistics

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