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There are two states of the economy: Boom and Recession where the probability of boom is 40%. Calculate the expected return of stock A if
There are two states of the economy: Boom and Recession where the probability of boom is 40%. Calculate the expected return of stock A if it is expected to gain 15% if a boom occurs and loses 5% if a recession occurs.
Is it 5%,4%,3%,2%?
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