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You are attempting to forecast the return of the S&P 500 under a variety of economic...

  1. You are attempting to forecast the return of the S&P 500 under a variety of economic scenarios. You have determined that there is a 10% chance of the U.S. entering a recession, a 70% chance of the U.S. experiencing normal growth and 20% chance of the U.S. experiencing above-normal growth. You expect the S&P 500 to return -20%, +8% and +30% returns under each of these scenarios. What is your expected return for the S&P 500?
    1. 5.2%
    2. 6.0%
    3. 9.6%
    4. 13.6%
    5. 15.1%
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Ans is c. 9.6%Please upvote if the ans is helpful. In case of doubt,do comment. Thanks.

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