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Dovetail stock is expected to lose 5.0 percent in a booming economy, earn 12.5 percent...

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Finance

Dovetail stock is expected to lose 5.0 percent in a booming economy, earn 12.5 percent in a normal economy, and earn 2.0 percent in a recession. The probability of a boom is 14 percent while the probability of a normal economy is 57 percent. What is the expected rate of return on this stock?

Multiple Choice 7.01% 8.41% 4.41% 3.17% 2.89%

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