Question
The rates of return for a stock are as follows: 4% if the state of the economy is recession; 8% if the state of the
The rates of return for a stock are as follows: 4% if the state of the economy is recession; 8% if the state of the economy is normal; and 11% if the state of the economy is expansion. The probability for each state of the economy is 36%, 42%, and 22%, respectively. What is this stock's expected return?
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
5th Edition
0072339160, 978-0072339161
