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9. The stock of Kramer's Machine Shop has an expected return of 3.3%. Given the information below, what is the expected return on this stock

The stock of Kramer's Machine Shop has an expected return of 3.3%. Given the information below, what is the expected return on this stock if the economy booms?

Probability

State of of State of Rate of

Economy Economy Return

Recession 0.35 -0.04

Normal 0.60 0.07

Boom 0.05 ?

	a.	8.6%
	b.	10.0%
	c.	10.69%
	d.	10.48%
	e.	9.2%

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