Question: 25) A stock is expected to return 11% in a normal economy, 19% if the economy booms, and 25) lose 8% if the economy moves
25) A stock is expected to return 11% in a normal economy, 19% if the economy booms, and 25) lose 8% if the economy moves into a recessionary period. Economists predict a 65% chance of a normal economy, a 25% chance of a boom, and a 10% chance of a recession. What is the expected return on the stock? A) 11.10% B) 11.98% C) 12.06% D) 11.23%
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