What Is the Expected Return on This Stock Given the Following

question 86

Multiple Choice

What is the expected return on this stock given the following information?
$\begin{array}{lcc}\text { State of the Economy}&\text { Probability}&\text { E(R) }\\\text { Boom } & .4 & 12\% \\\text { Recession } & .6 & -12\%\end{array}$

• A)5.70%
• B)5.20%
• C)4.80%
• D)3.70%
• E)2.40%