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The Mehdi Co . stock is expected to earn 5 . 5 percent in a recession, 1 0 percent in a normal economy, and lose

The Mehdi Co. stock is expected to earn 5.5 percent in a recession, 10 percent in a normal economy, and lose 1.5 percent in a booming economy. The probability of a boom is 12 percent while the probability of a normal economy is 60 percent. What is the expected rate of return on this stock?
Multiple Choice
7.72%
7.36%
1.66%
.46%
4.67%

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