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The expected return on a security given two unequal states of the economy:

a. will equal the overall expected return on the market.

b. is affected by the probability of occurrence of each economic state.

c. will always be higher than that based on a single economic state.

d. is computed as the arithmetic average of the returns for each state.

e. is computed as the geometric average of the returns for each state.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91544752

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