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Calculate the ex ante expected return on pakcom

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Sheridan Inc. conducted an extensive analysis of the economy and concluded that the probability of a recession next year is 35 percent, the probability of a boom is 45 percent, and the probability of a stable economy is 20 percent. Your boss has estimated that the price of PakCom Ltd. will be $69 if there is a recession, $119 if there is a boom, and $94 if the economy is stable. Currently, PakCom is trading for $89.

Calculate the ex ante expected return on PakCom. (Round answer to 2 decimal places, e.g. 15.25%.)

Expected return= %

Reference no: EM132485094

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