What Is the Expected Return on This Stock Given the Following

question 38

Multiple Choice

What is the expected return on this stock given the following information?
$\begin{array}{lcc}\text { State of the Economy }&\text { Probability}&\text { E(R) }\\\text { Boom } & .25 & 20\% \\\text { Normal } & .55 & 15\% \\\text { Recession } & .20 & -12 \%\end{array}$

• A)9.36%
• B)9.74%
• C)10.85%
• D)11.78%
• E)12.05%

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