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(Solved): There is a 75 percent chance the economy will boom and 25 percent chance it will be normal. If it bo ...



There is a 75 percent chance the economy will boom and 25 percent chance it will be normal. If it booms, a stock will return 23 percent but if it is normal, the stock will lose 15 percent. Illustrate the expected return calculation. Multiple choice question. E(R) = (0.75 × 0.23) × (0.25 × -0.15) E(R) = (0.75 + 0.23) × (0.25 - 0.15) E(R) = (0.25 - 0.15) × (0.75 + 0.25) E(R) = (0.75 × 0.23) + (0.25 × -0.15)



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