You Recently Purchased a Stock That Is Expected to Earn

question 195

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:

Diverse Society

indicates a community composed of individuals from a variety of backgrounds, cultures, races, identities, and perspectives.

Minorities

Groups of individuals differing from the larger population in terms of race, religion, language, or other characteristics, often facing disproportionate social or economic barriers.

Blaming Others

The act of assigning responsibility for faults or wrongs to someone else.

Unfairly

In a manner that is not based on justice or equality; biased or prejudiced treatment.