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Compute the expected rate of return for lauren

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Ahmed as an investor considering the world economic outlook for the coming year. The standard deviation for Lauren Labs is 19 percent and Sophie Labs is 14 percent. The covariance between these two shares is 100. He wants to estimate the sales and earnings for the pharmaceutical industry, he expect the rate of return for Lauren Labs common share to range between -30 percent and +45 percent with the following probabilities:

Compute the expected rate of return for Lauren Labs and the correlation between Lauren and Sophie share.

Reference no: EM132766780

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