Question: A stock is expected to return 10% in a normal economy, 20% if the economy booms and lose 79 if the economy moves into a

 A stock is expected to return 10% in a normal economy,

A stock is expected to return 10% in a normal economy, 20% if the economy booms and lose 79 if the economy moves into a recessionary period, Economists predict a 65% chance of a normal economy, a 254. chance of a boom and a 10% chance of a recession. What is the expected return on the stock? O A 11.104 B.3.704 OC 10.804 0.12.20

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!