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You recently purchased a stock that is expected to earn 17 percent in a booming economy, 12 percent in a normal economy, and lose 5

You recently purchased a stock that is expected to earn 17 percent in a booming economy, 12 percent in a normal economy, and lose 5 percent in a recessionary economy. There is 17 percent probability of a boom, 66 percent chance of a normal economy, and 17 percent chance of a recession. What is your expected rate of return on this stock?

8.00%

4.17%

9.96%

4.98%

9.67%

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