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PROBLEMS - Write down the process of calculation clearly. ( 4 0 % ) 1 2 . The rate of return on the common stock

PROBLEMS - Write down the process of calculation clearly. (40%)
12. The rate of return on the common stock of Apple is expected to be 22 percent in a boom economy and 3 percent in a recession. The probability of a boom in the following year is 25 percent. What is the expected return of the common stock? (7%)
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