There is 7 percent probability of recession, 18 percent probability of a poor economy, 50 percent probability of a normal economy, and 25 percent probability of a boom. A stock has returns of ?20.5 percent, 4.1 percent, 11.9 percent and 27.6 percent in these states of the economy, respectively. What is the stock's expected return?

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The expected return of the stock can be calculated by multip... View the full answer