What is expected rate of return on this stock

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Reference no: EM13826786

You recently purchased a stock that is expected to earn 19 percent in a booming economy, 14 percent in a normal economy, and lose 3 percent in a recessionary economy. There is a 21 percent probability of a boom, a 70 percent chance of a normal economy, and a 9 percent chance of a recession. What is your expected rate of return on this stock?

3.33 percent

13.52 percent

6.76 percent

10.00 percent

11.00 percent

Reference no: EM13826786

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