NEW a Stock Is Projected to Return 15% During Economic

question 59

Multiple Choice

NEW A stock is projected to return 15% during economic booms, -4% during recessions and 8% otherwise. If reports indicate the probability of a recession has decreased, what would happen to the stock's expected return?

• A) There would be no change to the expected return.
• B) The expected return would increase.
• C) The expected return would decrease.
• D) The expected return would increase or remain constant.
• E) The expected return would decrease or remain constant.

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