Compute the Expected Return Given These Three Economic States, Their

question 62

Multiple Choice

Compute the expected return given these three economic states, their likelihoods, and the potential returns:
$$\begin{array}{l}\begin{array} { c c r } \text { Eccrorric State }&\text { Probability } & \text { Return } \\\text { fast growth }&0.1 & 50 \% \\\text {slow growth }&0.6 & 8\% \\\text { recession }&0.3 & - 10\%\end{array}\end{array}$$

• A) 6.8 percent
• B) 12.8 percent
• C) 16.0 percent
• D) 22.7 percent

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Definitions:

Orbicular

Shaped like a circle or orbit; referring to muscles that encircle openings in the body, such as the orbicularis oris muscle around the mouth.

Antagonist

Muscle that works in opposition to another muscle.

Opposition

Movement of the thumb and little finger toward each other; movement of the thumb toward any of the fingers.

Greatest Force

The maximum strength or impact of a physical action or phenomenon.