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The Rotor Co. stock is expected to earn 14% in a recession, 6% in a normal economy, and lose 4% in a booming economy. The
The Rotor Co. stock is expected to earn 14% in a recession, 6% in a normal economy, and lose 4% in a booming economy. The probability of a boom is 20% while the probability of a normal economy is 55% and the chance of a recession is 25%. What is the expected rate of return on this stock? A. 6.00% B. 6.72% C. 6.80% D. 7.60% E. 11.33%
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