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You recently purchased a stock that is expected to earn 12 percent in a booming economy,...

You recently purchased a stock that is expected to earn 12 percent in a booming economy, 6 percent in a normal economy, and lose 2 percent in a recessionary economy. There is 15 percent probability of a boom, 74 percent chance of a normal economy, and 11 percent chance of a recession. What is your expected rate of return on this stock?

  • 5.33%

  • 6.25%

  • 6.00%

  • 3.01%

  • 6.02%

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