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Yeadon Construction's stock is expected to earn 5 percent in a weak economy, 12 percent in a normal economy, 20 percent in a strong economy,
Yeadon Construction's stock is expected to earn 5 percent in a weak economy, 12 percent in a normal economy, 20 percent in a strong economy, 30 percent in a booming economy, and lose 20 percent in a recession. The probability of a recession is 5 percent, the probability of weak economy is 15 percent, the probability of a normal economy is 48 percent, the probablity of a strong economy is 27 percent, and the probability of a booming economy is 5 percent. What is the expected rate of return on this stock?
A. | 15.17% |
B. | 13.41% |
C. | 11.66% |
D. | 16.72% |
E. | 12.41% |
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