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An analyst estimates there is a probability of 1 7 percent that there will be a recession next year. He thinks the probability of things
An analyst estimates there is a probability of percent that there will be a recession next year. He thinks the probability of things being normal is three times the probability of a recession, with the remaining probability assigned to a boom taking place. A stock is expected to return percent in a recession, percent under normal conditions and percent if there is a boom. What is the expected return in percent on this stock? Answer to two decimals, carry intermediate calcs. to four decimals.
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