You Recently Purchased a Stock That Is Expected to Earn

question 234

Multiple Choice

You recently purchased a stock that is expected to earn 16% in a booming economy, 12% in a normal economy, and lose 8% in a recessionary economy. There is a 20% probability of a boom, a 70% chance of a normal economy, and a 10% chance of a recession. What is your expected rate of return on this stock?

• A) 6.00%
• B) 6.67%
• C) 8.60%
• D) 10.80%
• E) 12.40%

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Definitions:

Presenter View

A feature in presentation software that provides the speaker with a private view of the presentation slides, notes, and timing, while displaying only the slides to the audience.

Slide Show

A presentation of a series of images or pages, often displayed on a screen one after the other, typically with automatic progression or user control.

Kiosk

A stand-alone physical structure often used for commercial purposes, such as information dissemination, exhibitions, or electronic transactions.

Slide Show

A presentation format where a series of digital slides containing text, images, or video is displayed in sequence, often used for educational or informational purposes.