You are analyzing a potential investment. The returns of this investment depend of the state of...
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You are analyzing a potential investment. The returns of this investment depend of the state of the world. There are three possible states of the world. Recession (probability = 18%): Return = -26% Normal (probability = 20%): Return = 9% Expansion: Return = 22% What is this investment's expected return? [note: your answer should have at least two decimal places] You are analyzing a potential investment. The returns of this investment depend of the state of the world. There are three possible states of the world. Recession (probability = 18%): Return = -26% Normal (probability = 20%): Return = 9% Expansion: Return = 22% What is this investment's expected return? [note: your answer should have at least two decimal places]
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