Stock A has the following returns for various states of the economy: S

Stock A has the following returns for various states of the economy:
State of the
Economy Probability Stock A’s Return
Recession 9% -72%
Below Average 16% -15%
Average 51% 16%
Above Average 14% 35%
Boom 10% 85%
Stock A’s expected return is

A) 13.8%. B) 9.9%. C) 12.7%. D) 16.5%.

ANSWER

C