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# Suppose you are given the following forecasts for the economy and for Sneezy Company at the ...

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

 State of the Economy Probability of Occurrence Expected Return Expansion 20% 20% Normal 60% 12% Recession 20% -10%
During the year, you observed the following:

 Quarter Opening Price Dividend Closing 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

Edition: 5th
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greiner76greiner76
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