The Expected Return on a Stock Given Various States of the Economy

question 48

Multiple Choice

The expected return on a stock given various states of the economy is equal to the:

• A) highest expected return given any economic state.
• B) arithmetic average of the returns for each economic state.
• C) summation of the individual expected rates of return.
• D) weighted average of the returns for each economic state.
• E) return for the economic state with the highest probability of occurrence.

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Definitions:

Sociological Imagination

The ability to see the relationship between individual experiences and larger societal patterns.

Equality Of Opportunity

The principle that all individuals should have the same chances to succeed, without facing discrimination or unfair barriers.

Social Solidarity

The sense of unity and mutual support within a society that binds individuals together.

Max Weber

A German sociologist, philosopher, and political economist who significantly contributed to the methodology of social science and the concept of bureaucracy.