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cupoosta [38]
3 years ago
8

You recently purchased a stock that is expected to earn 20 percent in a booming economy, 15 percent in a normal economy, and los

e 2 percent in a recessionary economy. There is 21 percent probability of a boom, 72 percent chance of a normal economy, and 7 percent chance of a recession. What is your expected rate of return on this stock
Business
1 answer:
OlgaM077 [116]3 years ago
3 0

Answer:

rE = 0.1486 or 14.86%

Explanation:

The expected rate of return of a stock is the mean return that is expected to be earned by the stock considering the different scenarios that can occur, the return in these scenarios and the probability of the occurrence of these scenarios. The formula for expected rate of return of stock is,

rE = pA * rA  +  pB * rB  +  ...  + pN * rN

Where,

  • pA, pB, ... represents the probability that scenario A, B and so on will occur or the probability of each scenario
  • rA, rB, ... represents the return in scenario A, B and so on

rE = 0.21 * 0.2  +  0.72 * 0.15  +  0.07 * -0.02

rE = 0.1486 or 14.86%

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Answer:

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4 0
2 years ago
Johanna is responsible for setting goals and planning at a medium- sized company. Her job title is director of communications. W
umka2103 [35]

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5 0
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Which of the following is NOT a role the Human Resources department plays when helping orient employees?
raketka [301]

Answer:

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HR would orient employee by introducing them to their co-workers, assist them in their adjustment phase, and also help them fill paperwork.

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Thus the correct answer is the last option.

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astra-53 [7]

Answer:

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