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We estimate that there will be two states of the economy, boom and bust, in the next period, with probability of 30% and 70%, respectively.
We estimate that there will be two states of the economy, boom and bust, in the next period, with probability of 30% and 70%, respectively. We also estimate that the return on Stock A will be 50% in the boom state and -10% in the bust state. What is the expected return on Stock A?
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