Monica recently purchased a stock that is expected to earn 12 percent in a booming economy, 9 percent in a normal economy and lose 7 percent in a recessionary economy. Monica believes that there is a 17 percent probability of a boom and a 74 percent chance of a normal economy. Calculate Monica's expected return on this stock.

• 8.07

• 7.00

• 7.23 (Incorrect)

• 8.53

• 9.33