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Question
An investor owns a security that is expected to return 14 percent in a booming economy and 6 percent in a normal economy. The overall expected return on the security is 8.88 percent. Given there are only two states of the economy, what is the probability that the economy will boom?A. 28 percent
B. 33 percent
C. 36 percent
D. 41 percent
E. 45 percent
Answer
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Related questions
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Which one of the following statements regarding an original issue $25,000 GNMA bond is correct?
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