An analyst is studying the movement of the stock Philippines. His research and came up with a different rates of return for Philippines, 25% for strong and 10% for weak economic scenarios. Based on the latest economic outlook, the probability of having a strong, normal, and weak economy, are 30%, 50%, and 20%, respectively. The total expected return of Philippines stock is 17% considering the various probabilities. Determine the rate of return of Philippines if the economy turns normal.
An analyst is studying the movement of the stock Philippines. His research and came up with a different rates of return for Philippines, 25% for strong and 10% for weak economic scenarios. Based on the latest economic outlook, the probability of having a strong, normal, and weak economy, are 30%, 50%, and 20%, respectively. The total expected return of Philippines stock is 17% considering the various probabilities. Determine the rate of return of Philippines if the economy turns normal.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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