What Is the Expected Return on This Stock Given the Following

question 65

Multiple Choice

What is the expected return on this stock given the following information?
$\begin{array}{lcr}\text { State of the Economy } & \text { Probability } & E(R) \\\text { Boom } & .7& 12 \% \\\text { Recession } & .3 & 8\%\end{array}$

• A)6.00% .
• B)2.00%
• C)0%
• D)2.00%.
• E)6.00%

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Definitions:

Chain-Of-Command

The hierarchy within an organization that establishes who is in charge of whom and of whom permission must be asked.

Status Generalization

The process by which attributes of individuals, unrelated to a particular situation, influence the formation of status hierarchies within groups.

Biased

Having a predisposition or prejudice towards or against something or someone, often in a way considered to be unfair.

Middle Class

A socioeconomic group between the working class and upper class, typically associated with a moderate income, education, and lifestyle.