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second question: Below are the probability distribution and returns for Company A and Company B....

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Finance

second question: Below are the probability distribution and returns for Company A and Company B. (3 marks) Economic situation Probability of occurrence Company A returns Company B returns

Depression 0.25 0.14 0.55

natural 0.5 0.23 0.15

flourish 0.25 0.10 -0.15

Required : Calculate earnings per share. Calculate risk for each stock using appropriate metrics. If the correlation between the returns of Company A and the Al-Quds Index (1) and the correlation between the returns of Company B and Al-Quds Index (- 0.9) and the standard deviation of the market portfolio is 0.25, calculate the beta of each share and what is the decision taken.

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