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Jchanis15 Jchanis15
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A month ago
Suppose you are given the following forecasts for the economy and for Sneezy Company at the beginning of the year:

State of the EconomyProbability of OccurrenceExpected Return
Expansion20%20%
Normal60%12%
Recession20%-10%
During the year, you observed the following:

QuarterOpening PriceDividendClosing Price
January - March$14.72$0.50$15.32
April - June$15.32$0.50$16.50
July - September $16.50$0.50$16.18
October - December$16.18$0.50$16.76
a) Calculate the ex-ante expected return
b) Calculate the ex-ante standard deviation of returns
c) Calculate the ex-post average return
d) Calculate the ex-post standard deviation of returns
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
Author:
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greiner76greiner76
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A month ago
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Jchanis15 Author
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A month ago
This helped my grade so much Perfect
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this is exactly what I needed
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2 hours ago
Thanks
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