Business, 12.12.2019 05:31 adamske0

You are considering purchasing stock s. this stock has an expected return of 12 percent if the economy booms, 8 percent if the economy is normal, and 3 percent if the economy goes into a recessionary period. the overall expected rate of return on this stock will: a. be equal to one-half of 8 percent if there is a 50 percent chance of an economic boom. b. vary inversely with the growth of the economy. c. increase as the probability of a recession increases. d. be independent of the probability of each economic state occurring. e. increase as the probability of a boom economy increases.

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