Question: Calculate the expected return for two possible outcomes for the economy next year: recession and recovery Suppose for this example that we forecast a 59%

Calculate the expected return for two possible outcomes for the economy next year: recession and recovery Suppose for this example that we forecast a 59% chance of recession over the next year Lets suppose that we forecast that in a recession the firms return will be 6.96% and that in recovery the firms return will be 29.16%

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