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The rate of return for a stock is 3% if the state of the economy is recession, 8% if the state of the economy is
The rate of return for a stock is 3% if the state of the economy is recession, 8% if the state of the economy is normal, and 12% if the state of the economy is expansion. The probability for each state of the economy is 25%, 45%, and 30%, respectively. What is the expected return for this stock?
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