The inferior goods co stock is expected to earn 22 percent, Ask an Expert

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The Inferior Goods Co. stock is expected to earn 22 percent in a recession, 7 percent in a normal economy, and lose 14 percent in a booming economy. The probability of a boom is 20 percent while the probability of a normal economy is 55 percent. What is the expected rate of return on this stock?

A. 6.55%

B. 12.15%

C. 4.75%

D. 8.60%

E. 11.75%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92410951

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