Multiple Choice
The common stock of Manchester & Moore is expected to earn 13 percent in a recession,6 percent in a normal economy,and lose 4 percent in a booming economy.The probability of a boom is 5 percent while the probability of a recession is 45 percent.What is the expected rate of return on this stock?
A) 8.52 percent
B) 8.74 percent
C) 8.65 percent
D) 9.05 percent
E) 9.28 percent
Correct Answer:
Verified
Correct Answer:
Verified
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