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An analyst has estimated how a particular stocks return will vary depending on what will happen to the economy. What is the expected rate of
An analyst has estimated how a particular stocks return will vary depending on what will happen to the economy. What is the expected rate of return?
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STATE OF THE ECONOMY PROBABILITY OF STATE OCCURRING STOCK'S EXPECTED RATE IF THIS STATE OCCURS
Recession
Below Average
Average
Above Average
Boom
.10
.20
.40
.20
.10
(.60)
(.10)
.15
.40
.90
A15.00%
B12.00%
C16.00%
D11.00%
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