You Recently Purchased a Stock That Is Expected to Earn

question 47

Multiple Choice

You recently purchased a stock that is expected to earn 12 percent in a booming economy,9 percent in a normal economy,and lose 15 percent in a recessionary economy.The probabilities of a boom,a normal economy,and a recession are 18,75,and 7 percent,respectively.What is your expected rate of return on this stock?

• A)7)93%
• B)7)45%
• C)7)86%
• D)7)75%
• E)7)68%

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