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TABLE A Probability of Return Associated Level of Prob x Return Demand with Occurrence Occurrence...

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Finance

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TABLE A Probability of Return Associated Level of Prob x Return Demand with Occurrence Occurrence Weak -30% 0.25 -7.50% Below Average 0.2 -10% -2.00% 15% Average Above Average 0.1 1.50% 30% 0.15 4.50% 40% Strong 0.15 6.00% Very Strong 50% 0.15 7.50% 3. If the investment manager indicates that she has re-evaluated Stock ABC's return distribution from the scenario indicated in Table A to the scenario indicated in Table B, then hOw has Stock ABC's expected return and standard deviation changed? TABLE B Return Probability of Demand Associated with Prob x Return Occurrence Occurrence Weak -30% 0.05 -1.50% Below Average 0.1 -10% -1.00% 5.25% Average 0.35 15% Above Average 0.35 10.50% 30% Strong 0.1 40% 4.00% Very Strong 0.05 2.50% 50% i. The Expected Return for Scenario B is Higher Unchanged relative to that of Scenario A. . lower . ii. The Standard Deviation for Scenario B indicates that Scenario B has relative to that of Scenario A. Higher Risk Unchanged Risk Lower Risk b.

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