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 30%, 50%, and 20%, respectively.

A. 8.00%

B. 2.67%

C. 5.00%

D. 6.00%

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