1. Media Music stock is expected to earn 12 percent in a normal economy, 20 percent in a strong economy, 35 percent in a booming economy, and lose 20 percent in a recession. The probability of a recession is 17 percent while the probability of a normal economy is 48 percent, the probablity of a strong economy is 28 percent, and the probability of a booming economy is 7 percent. What is the expected rate of return on this stock?

   A.

   11.83%

   B.

   10.41%

   C.

   12.79%

   D.

   9.70%

   E.

   13.62%