You recently purchased a stock that is expected to earn 11 percent in a booming economy, 8 percent in a normal economy and lose 3 percent in a recessionary economy. There is a 18 percent probability of a boom, a 74 percent chance of a normal economy. What is your expected rate of return on this stock?

a. 6.14

b. 7.66

c 3.00

d. 7.72

e. 8.14