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The market risk premium is 9.25%. The rates of return for a stock are as follows: 2% if the economic state is recession; 8% if

The market risk premium is 9.25%. The rates of return for a stock are as follows: 2% if the economic state is recession; 8% if the economic state is normal; and 11% if the economic state is expansion. The probabilities of the economic states are as follows: 20% probability of recession; 45% probability of normal; and 35% probability of expansion. What is the expected return for this stock?

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