Homework Answers
Expected ret = Sum [ Prob * Ret ]
| Outcome | Prob | Ret | Prob * ret |
| Recession | 25% | -30% | -7.50% |
| Expansion | 40% | 15% | 6.00% |
| Boom | 35% | 55% | 19.25% |
| Expected Ret | 17.75% | ||
Option D is correct.
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