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Calculate the expected return of the stock with the following probability distribution of returns. State of Economy Probability of State 0.20 Return of Stock 50%

Calculate the expected return of the stock with the following probability distribution of returns.

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State of Economy Probability of State 0.20 Return of Stock 50% Boom Normal Economy 0.40 20% Slow Down 0.30 0% Recession 0.10 - 10% 15.00% 17.00% 17.50% 15.75%

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