In the next year, the economy can enter either a boom, a bust or remain in...

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In the next year, the economy can enter either a boom, a bust or remain in a normal state with the probabilities stated in the table. An investment has the following returns given the specific states: Returns Probability Boom Normal Bust 5% 12% 31% What is the expected return of this investment? 0.25 0.50 0.25 In the next year, the economy can enter either a boom, a bust or remain in a normal state with the probabilities stated in the table. An investment has the following returns given the specific states: Returns Probability Boom Normal Bust 5% 12% 31% What is the expected return of this investment? 0.25 0.50 0.25

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Given the different economic states and their prob... View the full answer