Compute the Expected Return Given These Three Economic States, Their

question 87

Multiple Choice

Compute the expected return given these three economic states, their likelihoods, and the potential returns: Economic State
Probability
Return
Fast Growth
0) 3
40%
Slow Growth
0) 4
15%
Recession
0) 3
-15%

• A)13.5 percent
• B)22.5 percent
• C)18.3 percent
• D)40.0 percent

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Definitions:

Presentment

The act of formally presenting a financial document, such as a check or draft, for acceptance or payment.

Discharge

The release from a legal obligation, such as the fulfillment of a debt or contractual requirement.

Individual

A single human being distinct from a group, class, or family.

Instrument

An instrument is a legal document that formally records or grants a right, like contracts, wills, or deeds.