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17) You are considering purchasing shares in Pauls Playtime. If the economy is in a recession the expected return on this stock is a loss

17) You are considering purchasing shares in Pauls Playtime. If the economy is in a recession the expected return on this stock is a loss of 33%. If the economy is booming you expect a return of 30%. If the economy is normal your return should be 9%. The probability of a recession is 20% and a 5% chance of a boom. What is your expected rate of return on this stock?

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2.60%

3.50%

-2.25%

-3.40%

1.65%

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