What Is the Expected Return on This Stock Given the Following

question 76

Multiple Choice

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

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

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Definitions:

Severe Bereavement

Intense and profound state of mourning and grief following the death of a loved one, beyond the normal scope of bereavement reactions.

Hardy Personality

A personality trait characterized by resilience and the ability to remain calm and clear-headed under stress.

Assertive

The quality of being confidently aggressive or self-assured in stating one's opinions without being aggressive.

Unfazed by Stress

Remaining calm and not being easily disturbed or stressed by challenging situations.