YouhavedoneathoroughstudyoftheeconomyandStockXandconcludedthat:(1)the probability of having a boom next year is 20 percent, a stable economy is 55 percent, and a recession is 25 percent, and (2) the price of Stock X will be $45 if there is a boom, $25 if the economy is stable, and $15 if there is a recession. What is the ex ante expected return on Stock X if it is currently selling for $24?

How to get the expected return of 87.50% , 4.17% and -37.50%

ProbPrice E(return) Prob*E(return) 0.175 0.55 25 4.17% 0.022916667 0.09375 10.417% 0.21 45 87.50% Boom Stable Recession 0.25 15-37.50%