You Own a Stock That You Think Will Produce a Return

Multiple Choice

You own a stock that you think will produce a return of 11 percent in a good economy and 3 percent in a poor economy. Given the probabilities of each state of the economy occurring, you anticipate that your stock will earn 6.5 percent next year. Which one of the following terms applies to this 6.5 percent?

A) Arithmetic return
B) Historical return
C) Expected return
D) Geometric return
E) Required return