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(a) Calculate the expected return and risk (standard deviation) for General Fudge for 200X, given the following information:

Probabilities 0.20 0.15 0.50 0.15

Possible Outcomes 20% 15% 11% -5%

(b) Suppose you had to choose between General Fudge and Stock B, with expected return E(rB)=9% and ?B=6%. Which is preferred on a stand-alone basis?

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Financial Management, Finance

Category:- Financial Management
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