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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Auditing The Art and Science of Assurance Engagements
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Ingrid B. Splettstoesser
12th Canadian edition
978-0133098235
