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You have predicted four different expected returns for four different scenarios of market volatility. You believe that there is a 15% chance of a boom
You have predicted four different expected returns for four different scenarios of market volatility. You believe that there is a 15% chance of a boom in the economy, a 65% chance of the economy being stable, a 15% chance of a slow down and 5% chance of a recession. During a boom in the economy you believe the stock would provide a 13.5% return, an 8.5% return in a stable economy, a 3.2% return in a slow down and a -0.5% return in a recession. What is the expected return for this tock? please show your calculation
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