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There is 8 percent probability of recession, 23 percent probability of a poor economy, 45 percent probability of a normal economy, and 24 percent probability
There is 8 percent probability of recession, 23 percent probability of a poor economy, 45 percent probability of a normal economy, and 24 percent probability of a boom. A stock has returns of 21 percent, 4.6 percent, 12.4 percent and 28.1 percent in these states of the economy, respectively. What is the stock's expected return?
There is 8 percent probability of recession, 23 percent probability of a poor economy, 45 percent probability of a normal economy, and 24 percent probability of a boom. A stock has returns of -21 percent, 4.6 percent, 12.4 percent and 28.1 percent in these states of the economy, respectively. What is the stock's expected return? Multiple Choice 15.06% 10.73% 6.03% 11.70% 13.38%Step by Step Solution
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