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Expected return for alpha corporation


Question: Consider the following probability distribution of returns for Alpha Corporation:

Current Stock Price ($25):
One Year ($) $35, $25, $20;
Return R: 40%, 0%, -20%;
Probability PR: 25%, 50%, 25%.

(A). Compute the expected return for Alpha Corporation.

(B). Compute the standard deviation of the return on Alpha Corporation.

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