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Consider the following two stocks. Probabilities ( pi pi ) Stock a Stock b Recession p1= p1= 23% -3% 10% Normal p2= p2= 21% 7%
Consider the following two stocks.
| Probabilities (pipi ) | Stock "a" | Stock "b" | |
| Recession | p1=p1= 23% | -3% | 10% |
| Normal | p2=p2= 21% | 7% | -7% |
| Boom | p3=p3= 56% | 14% | 24% |
What is the expected return of each stock? Enter your answers as a percentage rounded to 2 decimal places. Do not enter the percentage sign in your answer.
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Business Finance
Authors: Brian Watts
8th Edition
0712110720, 978-0712110723
