Booming economy and normal economy

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You recently purchased a stock that is expected to earn 10 percent in a booming economy, 4 percent in a normal economy, and lose 4 percent in a recessionary economy. There is a 15 percent probability of a boom, a 70 percent chance of a normal economy, and a 15 percent chance of a recession. What is your expected rate of return on this stock? 1.85 percent 3.70 percent 10.00 percent 4.67 percent 3.33 percent.

Reference no: EM132023620

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