Question: Compute the expected return given these three economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast Growth 0.1 50 % Slow

Compute the expected return given these three economic states, their likelihoods, and the potential returns:

Economic State Probability Return
Fast Growth 0.1 50 %
Slow Growth 0.6 8 %
Recession 0.3 10 %

Multiple Choice

  • 6.8 percent

  • 12.8 percent

  • 16.0 percent

  • 22.7 percent

  • Please correct answer please. Thank you!

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