An investor owns a security that is expected to return 12% in a booming economy and 4% in a normal economy. The overall expected return on the security is 7.80%. Given there are only two states of the economy, what is the probability that the economy will boom?
A)35.0%
B)37.5%
C)40.0%
D)45.0%
E)47.5%

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The Answer of An investor owns a security that is expected to return 12% in a booming economy and 4% in a normal economy. The overall expected return on the security is 7.80%. Given there are only two states of the economy, what is the probability that the economy will boom?
A)35.0%
B)37.5%
C)40.0%
D)45.0%
E)47.5%

An Investor Owns a Security That Is Expected to Return