Question: P13-6 Calculating Expected Return [LO1] Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Recession 0.21

P13-6 Calculating Expected Return [LO1]

Consider the following information:
State of Economy Probability of State of Economy Rate of Return if State Occurs
Recession 0.21 -0.05
Normal 0.35 0.16
Boom 0.44 0.31
Required:
Calculate the expected return.
19.10%
2.80%
18.19%
18.92%
17.28%

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