Stock A has the following returns for various states of the economy: State of the Stock A's Probability Return Economy Recession 10% -30% Below 20% -2% Average Average 40% 10% Above Average 20% 18% Boom 10% 40% Stock A's expected return is 5.4%. 0 7.2%. 8.2%. 9.6% -3 lx -30 2x 2 -4 X 1 2 2 x 18 306 x 40 - 4.0