Question: What is the expected return on this stock given the following information? State of the Economy Probability of State of Economy Rate of Return if

What is the expected return on this stock given the following information?

State of the Economy Probability of State of Economy Rate of Return if State Occurs
Boom 0.15 22 %
Normal 0.60 11 %
Recession 0.25 -14 %

Multiple Choice

A. 6.40 percent

B. 13.40 percent

C. 14.25 percent

D. 8.99 percent

E. 6.57 percent

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