You Recently Purchased a Stock That Is Expected to Earn

question 20

Multiple Choice

You recently purchased a stock that is expected to earn 12% in a booming economy,8% in a normal economy and lose 5% in a recessionary economy. There is a 15% probability of a boom,a 75% chance of a normal economy,and a 10% chance of a recession. What is your expected rate of return on this stock?

• A) 5.00%
• B) 6.45%
• C) 7.30%
• D) 7.65%
• E) 8.30%

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Definitions:

Salutary Goals

are objectives or outcomes that contribute positively to an individual’s well-being or health.

Health Promoting

Actions or behaviors that contribute to the maintenance or improvement of health and well-being.

Correct Deficiencies

The process of identifying and rectifying lacks or shortcomings in a system, individual skills, or organizational processes.

Contextualizing

Placing concepts, events, or activities in their appropriate contexts to provide deeper understanding or meaning.