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You recently purchased a stock that is expected to earn 13 percent in a booming economy, 10 percent in a normal economy and lose 4 percent in a recessionary economy. There is a 12 percent probability of a boom, a 75 percent chance of a normal economy. What is your expected rate of return on this stock?

a) 4.00

b) 7.97

c) 8.54

d) 9.58

e) 8.94