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The midterm election is coming, and to a large extend, the future market performance depends on which party becomes majority in the House. Historically, the

The midterm election is coming, and to a large extend, the future market performance depends on which party becomes majority in the House. Historically, the market return was 5% a year after an Republicans take the majority, and 3% if the Democrats keep the majority. Suppose you are predicting that the likelihood for the Democrats to win is 70%, what market return would you expect to see next year?

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