Suppose the future market states and the return of an asset is summarized by the table below. What is the expected return of this asset?
State of the Market
Probability
Year-end Price
Dividend
Return
Excellent
0.25
126.50
4.50
0.3100
Good
0.45
110.00
4.00
0.1400
Poor
89.75
3.50
-0.0675
Crash
0.05
46.00
2.00
-0.5200
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