Compute the Expected Return Given These Three Economic States, Their

question 59

Multiple Choice

Compute the expected return given these three economic states, their likelihoods, and the potential returns: Economic State
Probability
Return
Fast Growth
0) 1
50%
Slow Growth
0) 6
8%
Recession
0) 3
-10%

• A)6.8 percent
• B)12.8 percent
• C)16.0 percent
• D)22.7 percent

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Definitions:

Equator

An imaginary line around the middle of the Earth, equally distant from the North and South Poles, dividing the Earth into the Northern and Southern Hemispheres.

Rain Shadow Effect

A climatological phenomenon where one side of a high mountain range receives significant rainfall, while the other side remains dry and desert-like.

Large Cities

Urban areas characterized by high population density and significant infrastructure, offering a wide range of services and resources.

Desert's Perimeter

The boundary or edge of a desert, often characterized by a gradual transition into different ecosystems.