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Compute expected rate of returns and standard deviation

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Problem 1: There are three states of the economy: strong economy, weak economy and no major change. Probabilities of these states of the economy are 0.15, 0.15 and 0.70 respectively and rates of return in these states of the economy are 20%, -20% and 10% respectively. Compute expected rate of returns and standard deviation from these data.

Reference no: EM132913114

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