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    Finance: Expected Rate of Return for Investment Scenarios

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    What is the expected rate of return for an investment that has the following expected scenario? If there is an 18% probability of a recession, 2.0% return; if there is a 65% probability of a moderate economy, 9.5% return; if there is a 17% probability of a strong economy, 14.2% return.

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    Scenario Probability Return

    Recession 18% 2%
    Moderate ...

    Solution Summary

    This solution provides a detailed, step-by-step explanation to the given finance problem.