The Rotor Co

question 88

Multiple Choice

The Rotor Co. stock is expected to earn 16% in a recession,7% in a normal economy,and lose 3% in a booming economy. The probability of a boom is 20% while the probability of a normal economy is 55% and the chance of a recession is 25%. What is the expected rate of return on this stock?

• A) 6.67%
• B) 7.25%
• C) 7.32%
• D) 8.40%
• E) 12.50%

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Definitions:

Organizational Commitment

The psychological attachment an employee feels towards their organization, including a desire to remain a member and a willingness to exert effort on its behalf.

Affective Commitment

The emotional attachment an employee feels towards their organization, which can influence their willingness to exert effort and remain with the company.

Normative Commitment

The level of an employee's psychological attachment to an organization, based on a sense of obligation to remain, rather than desire or necessity.

Affective Commitment

The emotional attachment and identification an employee has with their organization, which influences their willingness to continue working there.