Question
Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone: (Do not round intermediate calculations.
Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone: (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
| State of Economy | Probability of State of Economy | Security Return if State Occurs | ||||||||||
| Recession | 0.20 | 9.00 | % | |||||||||
| Normal | 0.50 | 15.00 | ||||||||||
| Boom | 0.30 | 24.00 | ||||||||||
Expected return %
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
5th Edition
0072339160, 978-0072339161
