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

Calculate the expected return for two possible outcomes for the economy next

Calculate the expected return for two possible outcomes for the economy next year: recession and recovery Suppose for this example that we forecast a 44% chance of recession over the next year Let's suppose that we forecast that in a recession the firm's return will be 6.56% and that in recovery the firm's return will be 23.76%

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