Question: You are considering buying stock A If the economy grows
You are considering buying stock A. If the economy grows rapidly, you may earn 30 percent on the investment, while a declining economy could result in a 20 percent loss. Slow economic growth may generate a return of 6 percent. If the probability is 15 percent for rapid growth, 20 percent for a declining economy, and 65 percent for slow growth, what is the expected return on this investment?
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