Assume that an economy can have four states: Severe recession, Mild recession, Normal growth, Boom.Probability of each scenario, stock and bond annual returns in that scenario are provided below.Let's also assume that you are creating a portfolio with 65% stocks and 35% bonds.Economy StateProbabilitySevere recession0.20Stock Return (%) Bond Return (%)#1TTMild recession0.30Normal growthBoom0.400.10How much is the annual standard deviation of Stock returns?Enter your answer in the following format: 0.1234Hint: Answer is between 0.1938 and 0.2373

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Answered: Assume that an economy can have four…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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