Multiple Choice
You recently purchased a stock that is expected to earn 25% in a booming economy,9% in a normal economy and lose 8% in a recessionary economy. There is a 15% probability of a boom,a 65% chance of a normal economy,and a 10% chance of a recession. What is your expected rate of return on this stock?
A) 7.65%
B) 8.05%
C) 8.67%
D) 8.83%
E) 9.00%
Correct Answer:
Verified
Correct Answer:
Verified
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