What Is the Expected Return on This Stock Given the Following

question 41

Multiple Choice

What is the expected return on this stock given the following information?
$\begin{array}{lcc}\text { State of the Economy } & \text { Probability of } & \text { Rate of Return if } \\& \text { State of Economy } & \text { state occurs }\\\text { Boom } & .15 & 22 \% \\\text { Normal } & .60 & 11 \% \\\text { Recession } & .25 & -14 \%\end{array}$

• A)6.40%
• B)6.57%
• C)8.99%
• D)13.40%
• E)14.25%

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Definitions:

Downsizing

The process of reducing the size of a company's workforce to lower costs and improve efficiency or profitability.

External Adaptation

The process through which organizations adjust and respond to changes in their external environment.

Internal Integration

The process of aligning and unifying various elements within an organization, such as departments, teams, and processes, to work cohesively towards common goals.

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