What Is the Expected Return on This Stock Given the Following

question 86

Multiple Choice

What is the expected return on this stock given the following information?
$\begin{array}{lcc}\text { State of the Economy}&\text { Probability}&\text { E(R) }\\\text { Boom } & .4 & 12\% \\\text { Recession } & .6 & -12\%\end{array}$

• A)5.70%
• B)5.20%
• C)4.80%
• D)3.70%
• E)2.40%

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Definitions:

AASB 141

An Australian accounting standard that specifies the accounting treatment and disclosures related to agricultural activity.

IAS 41

An international accounting standard that deals with the agriculture sector, detailing how agricultural assets and agricultural activity should be accounted for.

AASB 116

Refers to the Australian Accounting Standards Board's standard on Property, Plant, and Equipment, outlining the accounting treatment for these assets.

AASB 141

An accounting standard issued by the Australian Accounting Standards Board that deals with the agricultural sector, specifically the accounting for agricultural activity.