Question: What is the expected return on this stock given the following information? State of Economy Probability of State of Economy Rate of Return if State

What is the expected return on this stock given the following information?

State of Economy

Probability of State of Economy

Rate of Return if State Occurs

Boom

.22

21%

Normal

.58

12%

Recession

.20

-14%

8.36 percent

8.42 percent

8.54 percent

8.78 percent

9.05 percent

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