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With these numbers, figure out what the expected return is on the stock: Recession probability = 35% Recession price per share = $10/share Normal probability
With these numbers, figure out what the expected return is on the stock:
Recession probability = 35%
Recession price per share = $10/share
Normal probability = 40%
Normal price per share = $15/share
Boom probability = 35%
Boom price per share = $25/share
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