You Recently Purchased a Stock That Is Expected to Earn

question 377

Multiple Choice

You recently purchased a stock that is expected to earn 19% in a booming economy, 11% in a normal economy and lose 15% in a recessionary economy. There is a 20% probability of a boom, a 65%
Chance of a normal economy, and a 15% chance of a recession. What is your expected rate of return
On this stock?

• A) 6.8%
• B) 7.4%
• C) 8.7%
• D) 11.6%
• E) 13.2%

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Self-confidence

A feeling of trust in one's abilities, qualities, and judgment.

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The practice of interacting with others to exchange information and develop professional or social contacts.

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Individuals who take on the risk of starting and managing a business venture to achieve financial rewards and innovation.

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