Popular Finger Foods Stock Is Expected to Return 20 Percent

Popular Finger Foods stock is expected to return 20 percent in a booming economy, 14 percent in a normal economy, and -5 percent in a recession.The probabilities of an economic boom, normal state, or recession are 8 percent, 87 percent, and 5percent, respectively.What is the expected rate of return on this stock?

A) 13.53 percent
B) 12.92 percent
C) 13.20 percent
D) 14.16 percent
E) 13.95 percent

Correct Answer:

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