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The Return of Two Different Stocks Has the Following Distribution

Question 38

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The return of two different stocks has the following distribution depending on the market conditions. To decide on which is the best investment for an investor who prefers the highest average return bu the lowest risk, which of the following would be the most appropriate analysis to perform?
 Market Condition  Probability  Return of StockA  Return of Stock B  Bull 0.4$200$200 Stable 0.3$100$150 Bear 0.3$100$400\begin{array} { c c c l } \hline \text { Market Condition } & \text { Probability } & \text { Return of StockA } & \text { Return of Stock B } \\\hline \text { Bull } & 0.4 & \$ 200 & - \$ 200 \\\text { Stable } & 0.3 & \$ 100 & \$ 150 \\\text { Bear } & 0.3 & - \$ 100 & \$ 400 \\\hline\end{array}


A) compute the coefficient of variation
B) perform a two-way ANOVA
C) perform a multiple linear regression
D) set up the payoff table

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