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ABC Company stock is expected to return 20 percent in a booming economy, 15 percent...

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Question

Accounting

ABC Company stock is expected to return 20 percent in a booming economy, 15 percent in a normal economy, and 8 percent in a recession. The probabilities of an economic boom, normal state, or recession are 15 percent, 75 percent, and 10 percent, respectively. What is the expected rate of return on this stock?

Group of answer choices

13.45 percent

10.67 percent

12.45 percent

11.91 percent

9.00 percent

Answer & Explanation Solved by verified expert
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