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ABC Company stock is expected to return 20 percent in a booming economy, 15 percent in a normal economy, and 8 percent in a recession.
ABC Company stock is expected to return 20 percent in a booming economy, 15 percent in a normal economy, and 8 percent in a recession. The probabilities of an economic boom, normal state, or recession are 15 percent, 75 percent, and 10 percent, respectively. What is the expected rate of return on this stock?
Group of answer choices
13.45 percent
10.67 percent
12.45 percent
11.91 percent
9.00 percent
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