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The annual returns, in percentages, on stocks A and B for three possible states of the economy are given in the table below.
Economy State Probability Stock A Stock B
Good 0.5 40 20
Average 0.3 20 40
Bad 0.2 10 8
1. If one invested in Stock A, what would be the expected annual percentage return?
2. If one invested in Stock A, what would be the standard deviation of the percentage return?
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Determining the probability that the two choose the same number?
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