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Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Recession 0.11 -0.07 Normal 0.55 0.16 Boom

Consider the following information:

State of Economy	Probability of State of Economy	Rate of Return if State Occurs
Recession	0.11	-0.07
Normal	0.55	0.16
Boom	0.34	0.26

Required:

Calculate the expected return.

rev: 09_20_2012

17.71%

16.87%

2.33%

16.03%

17.54%

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