Consider the following two stocks. Probabilities (pipi ) Stock a Stock b Recession p1=p1= 36% -1% 4% Normal p2=p2= 38% 6% -5% Boom p3=p3= 26%
Consider the following two stocks.
| Probabilities (pipi ) | Stock "a" | Stock "b" | |
| Recession | p1=p1= 36% | -1% | 4% |
| Normal | p2=p2= 38% | 6% | -5% |
| Boom | p3=p3= 26% | 12% | 22% |
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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Authors: Herbert B Mayo
9th Edition
324561385, 978-0324561388
