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Please show work. Thank you. Question 2 8/8 pts You're trying to calculate the expected return of stock XYZ. You believe that XYZ has a
Please show work. Thank you.
Question 2 8/8 pts You're trying to calculate the expected return of stock XYZ. You believe that XYZ has a 15% chance of great performance over the next year, in which case it will generate a 0.28 stock return. You believe that there is a 25% chance that XYZ will have good performance, and generate a return of 0.18. You believe there is a 40% chance that XYZ will have OK performance, and generate a return of 0.09, and you believe there is a 20% chance that XYZ will have poor performance, and generate a negative return = -0.04. The risk free rate is 5%. What is the expected return? Present your answer in decimal format and round your answer to three decimal placesStep by Step Solution
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