Question: A stock is expected to return 10% in a normal economy, 20% if the economy booms, and lose 7% if the economy moves into a

A stock is expected to return 10% in a normal economy, 20% if the economy booms, and lose 7% if the economy moves into a recessionary period. Economists predict a 65% chance of a normal economy, a 25% chance of a boom, and a 10% chance of a recession. What is the expected return on the stock?

A. 11.10%

B. 10.80%

C. 12.20%

D. 8.70%

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