Question: An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy: Stock's expected State of Probability of

An analyst has estimated how a particular stock's return will vary

An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy: Stock's expected State of Probability of Return if this the Economy State Occurring State Occurs Recession 0.10 -24.5% Below Average 0.20 -10.5% Average 0.40 -1.0% Above Average 0.20 5.0% Boom 0.10 20.0% Calculate this stock's expected return (r^)

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