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Assume that the economy has an 36% chance of booming, a 39% chance of being normal, and being recessionary the remainder of the time. A
Assume that the economy has an 36% chance of booming, a 39% chance of being normal, and being recessionary the remainder of the time. A stock is expected to return 27.89% in a boom, 17% in a normal economy, and -12.31% in a recession. What is the expected return on the stock?
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