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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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Solution Summary

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

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

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