You have predicted the following returns for stocks A and B in three possible states of nature. What is expected return for stock A? State Probability A B Boom 0.1 0.20 0.30 Normal 0.4 0.10 0.20 Recesion 0.5 0.05 0.07

Select one:

a. 8.5%

b. 10.5%

c. 8.7%

d. 9.5%