The stock of Uptown Men's Wear is expected to produce the following returns given the various states of the economy. What is the expected return on this stock? Probabilities: Recession:0.35 Normal:0.4 Boom:0.25 Returns: Recession:-10% Normal:14% Boom:25%
- 6.40%
- 16%
- 8.35%
- 12.87%
- 7.05%
Note: Explain all steps comprehensively.