What Is the Expected Return on This Stock Given the Following

What is the expected return on this stock given the following information?
$\begin{array}{lcc}\text { State of the Economy } & \text { Probability of } & \text { Rate of Return if } \\& \text { State of Economy } & \text { state occurs }\\\text { Boom } & .15 & 22 \% \\\text { Normal } & .60 & 11 \% \\\text { Recession } & .25 & -14 \%\end{array}$

A) 6.40%
B) 6.57%
C) 8.99%
D) 13.40%
E) 14.25%

Correct Answer:

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