You recently purchased a stock that is expected to earn 15 percent in a booming economy, 10
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Question:
You recently purchased a stock that is expected to earn 15 percent in a booming economy, 10 percent in a normal economy, and lose 3 percent in a recessionary economy. There is 18 percent probability of a boom, 62 percent chance of a normal economy, and 20 percent chance of a recession. What is your expected rate of return on this stock?
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