Question: Please answer and explain 2. You are interested in buying a stock that has a price of $220. You have projected the following probabilities: Probability

Please answer and explain

Please answer and explain 2. You are interested in buying a stock

2. You are interested in buying a stock that has a price of $220. You have projected the following probabilities: Probability .10 .20 25 .20 .20 .05 Stock Price (in time 1) 400 300 240 180 140 80 Answer the following (showing all work): (a) what is the expected return on the stock if you buy today and sell next year? (b) what is the expected standard deviation of the stock

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