Expected rate of return on stock

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You recently purchased a stock that is expected to earn 12 percent in a booming economy, 8 percent in a normal economy and lose 5 percent in a recessionary economy. There is a 16 percent probability of a boom, a 74 percent chance of a normal economy. What is your expected rate of return on this stock?

  • 7.34
  • 7.68
  • 6.37
  • 8.34
  • 5.00

Reference no: EM131173306

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