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# Junkers stock is expected to return 12.7 percent in a normal economy, -18.4 percent in a recessionary economy, and 23.6 percent in a booming economy....

Junkers stock is expected to return 12.7 percent in a normal economy, -18.4 percent
in a recessionary economy, and 23.6 percent in a booming economy. The probability of a boom is 8 percent
and the probability of a recession is 22 percent. What is the expected rate of return on this stock?

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A.

6.73 percent

B.

8.21 percent

C.

8.57 percent

D.

10.22 percent

Score:

0/10

Junkers stock is expected to return 12.7 percent in a normal economy, ­18.4 percent in a recessionary economy, and 23.6 percent in a booming economy. The probability of a boom is 8 percent and the...

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