You recently purchased a stock that is expected to earn 19 percent in a booming economy, 12 percent in a normal economy, and lose 8 percent in a recessionary economy. The probability of a boom economy is 20 percent while the probability of a normal economy is 70 percent and a recessionary economy of 10 percent. What is your expected rate of return on this stock?

12.40 percent 10.40 11.40 13.40 14.40