Expected return on security given two unequal states

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Reference no: EM13876228

The expected return on a security given two unequal states of the economy:

a. will equal the overall expected return on the market.

b. is affected by the probability of occurrence of each economic state.

c. will always be higher than that based on a single economic state.

d. is computed as the arithmetic average of the returns for each state.

e. is computed as the geometric average of the returns for each state.

Reference no: EM13876228

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