Suppose your expectations regarding the stock market are as follows: State of the Economy Boom Normal growth Recession E (r) = Es-₁ p (s)r (s) Var (r) = 6² = Σ₁-1P (s)[r(s) - E(r)]² S= Probability 0.3 0.5 0.2 Mean Standard deviation HPR SD (r) = o = √Var (r) Required: Use above equations to compute the mean and standard deviation of the HPR on stock Round your answers to 2 decimal places.) % % 36% 18 -12

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