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Question 18 Illy Coffee common stock is currently selling for $25 per share. Security analysts at Goldman Sachs have assigned the following probability distribution to
Question 18 Illy Coffee common stock is currently selling for $25 per share. Security analysts at Goldman Sachs have assigned the following probability distribution to the price of (and rate of return on) Illy Coffee stock one year from now: Price Rate of Return Probability $15 -40.0% 0.10 $20 -20.0% 0.18 $32 +28.0% 0.45 $40 +60.0% 0.27 Assuming that Illy is not expected to pay any dividends during the coming year, determine the expected rate of return on Illy Coffee Stock. Question 18 options: 28.80% 21.20% 16.20% 7.00%
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