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Assume you are considering buying a stock. If the economy grows rapidly, you may earn 30% on the investment, while if the economy will get
Assume you are considering buying a stock. If the economy grows rapidly, you may earn 30% on the investment, while if the economy will get in recession, you will lose 20%. Slow economy growth may generate a return of 6%. If the probability is 15% for rapid growth, 20% for a declining economy, and 65% for slow growth, what is the expected return on this investment?
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