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Assume that there are two states of the economy, namely a booming economy and a...

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Accounting

Assume that there are two states of the economy, namely a booming economy and a stagnant economy. In a booming economy, a stock brings 35% return while it brings 5% return in a stagnant economy. If the expected return on the stock is 15%, what is the probability of a booming economy (pboom )?

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