Suppose your expectations regarding the stock market are as follows:State of the EconomyBoomNormal growthRecessionProbability0.30.40.3MeanStandard deviationE (r)Σ=1p(s)r(s)Var (r) = o² = Σ³-1 P (s)[r (s) — E (r)]²-SD (r) = o = √Var (r)Required:Use above equations to compute the mean and standard deviation of the HPR on stocks. (Do not round intermediate calculations.Round your answers to 2 decimal places.)14.00%23.24%HPRX2 decimal places required.44%14-16

Mean return is the average return. It takes into consideration all probabilities and their…

Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession Probability 0.3 0.4 0.3 Mean Standard deviation HPR E (r) Σs-1 P(s)r(s) Var (r) = o² = SD (r) = 0 = √Var (r) Required: Use above equations to compute the mean and standard deviation of the HPR on stocks. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 44% 14 -16 14.00% 23.24 % -1P (s)[r (s)- E (r)]²

Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession Probability 0.3 0.4 0.3 Mean Standard deviation HPR E (r) Σs-1 P(s)r(s) Var (r) = o² = SD (r) = 0 = √Var (r) Required: Use above equations to compute the mean and standard deviation of the HPR on stocks. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 44% 14 -16 14.00% 23.24 % -1P (s)[r (s)- E (r)]²

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 7P

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