Question: Exercise 3: You expect for next year that stock A has a value of 50 if the economy is weak, 60 if the economy is
Exercise 3: You expect for next year that stock A has a value of 50 if the economy is weak, 60 if the economy is normal, and 140 if the economy is strong. You expect for next year that stock B has a value of 60 if the economy is weak, 70 if the economy is normal, and 130 if the economy is strong. You estimate the probability of a weak economy to be 20%, of a normal economy to be 60%, and of a strong economy to be 20%. Calculate the expected value, variance and deviation of stock A and B. Which stocks do you choose
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