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Considering the world economic outlook for the coming year and estimates of sales and earnings for the pharmaceutical industry, you expect the rate of return

Considering the world economic outlook for the coming year and estimates of sales and earnings for the pharmaceutical industry, you expect the rate of return for ABC companys common stock to range between 20 percent and +40 percent with the following probabilities.

Probability 0.1 0.15 0.2 0.25 0.2 0.1
Possible Returns -0.20 -0.05 0.1 0.15 0.2 0.4

Compute the expected rate of return E(Ri) for ABC company.

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