Multiple Choice
The Inferior Goods Co.stock is expected to earn 18 percent in a recession,10 percent in a normal economy,and lose 21 percent in a booming economy.The probability of a boom is 22 percent while the probability of a normal economy is 75 percent.What is the expected rate of return on this stock?
A) 3.42%
B) 3.15%
C) 3.67%
D) 10.83%
E) 10.41%
Correct Answer:
Verified
Correct Answer:
Verified
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