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    Calculating Rate of return with probability

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    5. Calculating Expected Return. Based on the following information, calculate the
    expected return.

    State of Probability of State Rate of Return
    Economy of Economy if State Occurs

    Recession .30 -.02
    Boom .70 .24

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    Expected Return is defined as the summation of Probabilities multiplied by the corresponding ...

    Solution Summary

    The solution explains how to calculate rate of return given the probability of the returns