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4. Hull Consultants, a famous think tank in the Midwest, has provided probability estimates for the four potential economic states for the coming year. The

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4. Hull Consultants, a famous think tank in the Midwest, has provided probability estimates for the four potential economic states for the coming year. The probability of a boom economy is 10%, the probability of a stable growth economy is 15%, the probability of a stagnant economy is 50%, and the probability of a recession is 25%. Estimate the expected returns on the following individual investments for the coming year. Forecasted Returns for Each Economy INVESTMENT Boom Stock Corporate Bond 19% Government Bond | 8% Stable Growth Stagnant Recession 12% 7% 6% 4% 5% 4% -12% 3% 2% 25%

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