Question: Using the table below show and explain whether the two assets A and B are ideal for Hedging (7 Marks) State of the world Probability

  1. Using the table below show and explain whether the two assets A and B are ideal for Hedging (7 Marks)

State of the world

Probability

Return

A

Return

B

Expansion

25%

32%

5%

Normal

50%

14%

15%

Recession

25%

4%

25%

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