Question: The expected return on a security given multiple states of the economy: is unaffected by the likelihood that each state will occur. is unaffected by
The expected return on a security given multiple states of the economy:
is unaffected by the likelihood that each state will occur.
is unaffected by the expected return for a particular economic state.
is computed as the geometric average of the returns for each state.
is computed as the arithmetic average of the returns for each state.
will vary as the probabilities of occurrence for each state vary.
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