Question: Compute the expected return given these three economic states, their likelihoods, and the potential returns. Economic State Probability Return Fast Growth 0.1 50% Slow Growth

Compute the expected return given these three economic states, their likelihoods, and the potential returns.

Economic State Probability Return
Fast Growth 0.1 50%
Slow Growth 0.6 8%
Recession 0.3 -10%

A. 6.8 percent

B. 12.8 percent

C. 16.0 percent

D. 22.7 percent

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