The return on shares of Fast Transportation Company (FTC) is predicted under the following various economic conditions:

Recession -0.06
Normal +0.04
Boom +0.19

Analysts estimate the probability of recession at .40, the probability of normal conditions at 0.10, and the probability of an economic boom at 0.50.

What is the expected return of the stock?



Work your analysis out using at least four decimal places of accuracy, and place your answer in decimal form with four decimal points. That is, an answer of fifteen and two-thirds pwould be inputted as .1567.

Answer rating: 100% (QA)

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