Rosita Owns a Stock with an Overall Expected Return of 14.40

question 46

Multiple Choice

Rosita owns a stock with an overall expected return of 14.40%. The economy is expected to either boom or be normal. There is a 52% chance the economy will boom. If the economy booms, this stock is expected to return 15%. What is the expected return on the stock if the economy is normal?

• A)12.00%
• B)12.83%
• C)13.15%
• D)13.75%
• E)14.40%

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Definitions:

Returned Immigrants

Individuals who have migrated to a foreign country but later decide to return to their country of origin.

Immigrant Laborers

Workers who migrate from their country of origin to another country to seek employment, often filling roles in industries such as agriculture, construction, and services.

Economic Disaster

A situation where a significant and sudden downturn in the economy leads to widespread financial hardship.

Seasonal Agriculture

Farming activities that depend on seasonal cycles, often requiring temporary labor to plant, cultivate, and harvest crops.