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Expected return of stock=?
Probability of occurrence of boom in economy=50%
Rate of return on Stock A in boom=12%
Probability of occurrence of recession in economy=50%
rate of return on stock A in recession =10%
Any accounting specialist please solve this Quiz. Thanks

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Expected return of stock A in boom 0.06
Expected return of stock A in recession 0.05
Expected return of stock A

0.11 or 11%

formulas kuch solve kr k bta dain plzzzz

Formula

Expected return of stock A in boom= Probability of occurrence of boom in economy*
Rate of return on Stock A in boom
Expected return of stock A in recession= Probability of occurrence of recession in economy*
rate of return on stock A in recession
Expected return of stock A= Expected return of stock A in boom+Expected return of stock A in recession

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