A real estate investment is expected to earn 18 percent in a recession, 10 percent in a normal economy, and lose 21 percent in a booming economy. The probability of a boom is 22 percent while the probability of a normal economy is 75 percent. What is the expected rate of return on this investment?

Multiple Choice

• 3.42%

• 2.15%

• 8.67%

• 10.83%