You are considering investing in a project with the following possible outcomes:

StatesProbability of OccurrenceInvestment Returns

State 1: Economic boom15%16%

State 2: Economic growth45%12%

State 3: Economic decline25%5%

State 4: Depression15%-15%

Calculate the expected rate of return for this investment.

a.

6.8%

b.

7.2%

c.

8.3%

d.

6.3%