An analyst has estimated how a particular stock's return will vary depending on what will happen...

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An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy. What is the expected rate of return? 1. STATE OF THE ECONOMY Recession Below Average Average Above Average Boom PROBABILITY OF STATE OCCURRING .10 .20 .40 .20 .10 STOCK'S EXPECTED RATE IF THIS STATE OCCURS (.60) (.10) .15 .40 .90 An analyst has estimated how a particular stock's return will vary depending on what will happen to the economy. What is the expected rate of return? 1. STATE OF THE ECONOMY Recession Below Average Average Above Average Boom PROBABILITY OF STATE OCCURRING .10 .20 .40 .20 .10 STOCK'S EXPECTED RATE IF THIS STATE OCCURS (.60) (.10) .15 .40 .90