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A company is faced with a 20 percent chance of a poor economy, a 40 percent chance of an average economy, and a 40 percent

A company is faced with a 20 percent chance of a poor economy, a 40 percent chance of an average economy, and a 40 percent chance of an above-average economy. The company would expect only a 10 percent return in a poor economy, an 18 percent return in an average economy, and a 30 percent return in an above-average economy.

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