Crabby Shores Stock Is Expected to Return 15

question 73

Multiple Choice

Crabby Shores stock is expected to return 15.7 percent in a booming economy, 9.8 percent in a normal economy, and 2.3 percent in a recession.The probabilities of an economic boom, normal state, or recession are 15 percent, 73 percent, and 12 percent, respectively.What is the expected rate of return on this stock?

• A)10.07 percent
• B)10.74 percent
• C)10.61 percent
• D)9.79 percent
• E)8.68 percent

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