15 [Question text] Based on the following information, what is the expected return for the following stock?     State of Economy Probability of State of Economy Rate of Return if State Occurs Boom 0.06 -6% Normal 0.74 7% Recession 0.20 18%   Select one: A. 8.80 percent B. 8.23 percent C. 8.53 percent D. 8.42 percent

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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15 [Question text] Based on the following information, what is the expected return for the following stock?

 

 

State of

Economy

Probability of

State of Economy

Rate of Return

if State Occurs

Boom

0.06

-6%

Normal

0.74

7%

Recession

0.20

18%

 

Select one:
A. 8.80 percent
B. 8.23 percent
C. 8.53 percent
D. 8.42 percent
 
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