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A stock is expected to return 13 percent in an economic boom, 10 percent in a normal economy, and 3 percent in a recessionary economy.
A stock is expected to return 13 percent in an economic boom, 10 percent in a normal economy, and 3 percent in a recessionary economy. Which one of the following will lower the overall expected rate of return on this stock?
- A. A decrease in the probability of an economic boom
- B. An increase in the rate of return in a recessionary economy
- C. A decrease in the probability of a recession occurring
- D. An increase in the rate of return for a normal economy
- E. An increase in the probability of an economic boom
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