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Compute the expected return given these three economic states, their likelihoods, and the potential returns Economic state probability return fast growth 0.2 23% slow growth
Compute the expected return given these three economic states, their likelihoods, and the potential returns
Economic state | probability | return |
fast growth | 0.2 | 23% |
slow growth | 0.6 | 14% |
recession | 0.2 | -30% |
A)3.5%
B)7%
C)7.5%
D)12.5%
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