A stock analyst is studying the movement of the stock TEL. He conducted a research and came up with a different rates of return for these stock; 20% for strong and 5% for weak economic scenrios. Based on the latest economic outlook, the probability of having a strong, normal, and weak economy, are 25%, 45%, and 30%, respectively. The expected return of TEL stock is 11% has determined based on the probabilities presented. What is the rate of return of TEL if the economy turns normal? (In percentage, type the percentage sign on your answer)

A stock analyst is studying the movement of the stock TEL. He conducted a research and came up with a different rates of return for these stock; 20% for strong and 5% for weak economic scenrios. Based on the latest economic outlook, the probability of having a strong, normal, and weak economy, are 25%, 45%, and 30%, respectively. The expected return of TEL stock is 11% has determined based on the probabilities presented. What is the rate of return of TEL if the economy turns normal? (In percentage, type the percentage sign on your answer)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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what is the expected return and should you buy it?
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