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Suppose the economy has three states. The probability of each state and the corresponding market return is listed below: Economy Probability Market Recession 0.3 Average

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Suppose the economy has three states. The probability of each state and the corresponding market return is listed below: Economy Probability Market Recession 0.3 Average 0.4 Boom 0.3 What is the expected return of the market? 9% 4% 18% 10.0% a. 8.5% b. 9.7% C. 4.0% d

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