An Analyst Believes That a Stock's Return Depends on the State

question 61

Multiple Choice

An analyst believes that a stock's return depends on the state of the economy,for which she has estimated the following probabilities: According to the analyst's estimates,the expected return of the stock is ____.

• A) 7.8%
• B) 11.4%
• C) 11.7%
• D) 13.0%

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Definitions:

Indirect Method

A strategy or approach that does not address objectives or issues directly, but instead uses a more subtle or circuitous path.

Bad News

Information that is unpleasant, disappointing, or unfavorable to the receiver.

Parenthetical Expressions

Phrases or clauses inserted into a sentence as additional information, set off by parentheses, dashes, or commas.

Conditional Statement

A programming and logic construct that executes a set of instructions only if a specified condition is true.