Question: What is the expected return on an asset that is expected to have returns of -10%, 8%, and 20% when the economy is in boom,

What is the expected return on an asset that is expected to have returns of -10%, 8%, and 20% when the economy is in boom, normal, and recession states, respectively? The probabilities of boom, normal, and recession states happening are 20%, 50%, and 30%, respectively.

A)6.00%

B)2.67%

C)8.00%

D)5.00%

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