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Marigold Inc. conducted an extensive analysis of the economy and concluded that the probability of a recession next year is 35 percent, the probability of
Marigold Inc. conducted an extensive analysis of the economy and concluded that the probability of a recession next year is 35 percent, the probability of a boom is 45 percent, and the probability of a stable economy is 20 percent. Your boss has estimated that the price of PakCom Ltd. will be $51 if there is a recession, $101 if there is a boom, and $76 if the economy is stable. Currently, PakCom is trading for $71. Calculate the ex ante expected return on PakCom. (Round answer to 2 decimal places, e.g. 15.25%.)
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