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You recently purchased 100 shares of Diversified Industries, Inc. Diversified Industries is expected to earn 16 percent in a booming economy, 8 percent in a
You recently purchased 100 shares of Diversified Industries, Inc. Diversified Industries is expected to earn 16 percent in a booming economy, 8 percent in a normal economy, and lose 18 percent in a recessionary economy. There is a 5 percent probability of a boom and a 70 percent chance of a normal economy. What is your expected rate of return on your Diversified Industries' stock?
-2.95 percent
-1.25 percent
1.90 percent
2.00 percent
2.65 percent
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