Bridgeport Inc. conducted an extensive analysis of the economy and concluded that the probability of...
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Bridgeport Inc. conducted an extensive analysis of the economy and concluded that the probability of a recession next year is 30 percent, the probability of a boom is 40 percent, and the probability of a stable economy is 30 percent. Your boss has estimated that the price of PakCom Ltd. will be $65 if there is a recession, $115 if there is a boom, and $90 if the economy is stable. Currently, PakCom is trading for $85. Calculate the ex ante expected return on PakCom. (Round answer to 2 decimal places, e.g. 15.25\%.) Expected return % Attempts: 0 of 3 used Using multiple attempts will impact your score. 25% score reduction after attempt 1
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Bridgeport Inc. conducted an extensive analysis of the economy and concluded that the probability of a recession next year is 30 percent, the probability of a boom is 40 percent, and the probability of a stable economy is 30 percent. Your boss has estimated that the price of PakCom Ltd. will be $65 if there is a recession, $115 if there is a boom, and $90 if the economy is stable. Currently, PakCom is trading for $85. Calculate the ex ante expected return on PakCom. (Round answer to 2 decimal places, e.g. 15.25\%.) Expected return % Attempts: 0 of 3 used Using multiple attempts will impact your score. 25% score reduction after attempt 1 