Question
The rate of return for a stock is 8% if the state of the economy is recession, 12% if the state of the economy is
The rate of return for a stock is 8% if the state of the economy is recession, 12% if the state of the economy is normal, and 17% if the state of the economy is expansion. The probability for each state of the economy is 20%, 70%, and 10%, respectively. What is the expected return for this stock?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
16th edition
125927716X, 978-1259687969, 1259687961, 978-1259277160
