Question: Question 4: Based on the following information, calculate the expected return for each stock. State of Economy Return of Stock A Return of Stock B

Question 4: Based on the following information, calculate the expected return

Question 4: Based on the following information, calculate the expected return for each stock. State of Economy Return of Stock A Return of Stock B Probability of State of Economy 0.20 0.40 0.40 -0.05 Bear Normal Bull 0.05 0.07 0.10 0.20 0.10 What is the correlation between the returns of the two stocks? Assume the market has an expected return of 10% and a standard deviation of 20%. Also, Pam=0.8. Calculate Beta for Stock B

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