You have invested in a project that will generate the following rate of return depending on the state of the economy next year

Recession (probability 25%) -5%

Normal (probability 45%) +10%

Boom (probability 30%) +15%

Find the expected rate of return on the project.

	a.	8.50%
	b.	5.25%
	c.	7.75%
	d.	7.25%