The market risk premium is 9.25%. The rates of return for a stock are as follows: 2%
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The market risk premium is 9.25%. The rates of return for a stock are as follows: 2% if the economic state is recession; 8% if the economic state is normal; and 11% if the economic state is expansion. The probabilities of the economic states are as follows: 45% probability of recession;35% probability of normal;and 20% probability of expansion. What is the expected return for this stock?
Related Book For
Intermediate Financial Management
ISBN: 978-1111530266
11th edition
Authors: Eugene F. Brigham, Phillip R. Daves
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