Rosita Owns a Stock with an Overall Expected Return of 14.40

question 34

Multiple Choice

Rosita owns a stock with an overall expected return of 14.40 percent. The economy is expected to either boom or be normal. There is a 48 percent chance the economy will boom. If the economy booms, this stock is expected to return 15 percent. What is the expected return on the stock if the economy is normal?

• A) 12.00 percent
• B) 12.83 percent
• C) 13.15 percent
• D) 13.85 percent
• E) 14.40 percent

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Definitions:

Slapped

A physical action where a flat hand is swiftly brought into contact with someone or something, often used metaphorically to describe being abruptly confronted with reality or truth.

Physically Hurt

Experiencing pain or injury to the body due to external forces or actions.

Break Confidentiality

The act of disclosing information shared in a private, professional setting without the consent of the individual who confided the information, often contradicting ethical guidelines or laws.

Intimate Partner Violence

A pattern of behavior in a romantic relationship that involves physical, sexual, or psychological harm by a current or former partner.