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Brut
19 days ago
11

The following data represent the probability distribution of the holding period returns for an investment in Lazy Rapids Kayaks

(LARK) stock. State of the Economy Scenario #(s) Probability, p(s) HPR Boom 1 0.336 28.40% Normal growth 2 0.414 7.90% Recession 3 0.25 -18.90% a. What is the expected return on LARK? (Round your answer to 2 decimal places.) Expected return
Business
1 answer:
marusya05 [3.4K]19 days ago
6 0
The expected return is 17.5%. The expected return is determined as the weighted average of anticipated returns for each scenario, adjusted by their respective probabilities. The holding period returns (HPR) for three different scenarios are provided for calculations leading to the expected return.
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