What Is the Expected Return on a Stock with a Guaranteed

Multiple Choice

What is the expected return on a stock with a guaranteed dividend of $3 if there is a 30-percent chance its price could rise by 50 percent, a 30-percent chance its price could fall by 50 percent, and a 40-percent chance its price could stay constant at the present price of $60 per share?

A) $60
B) $33
C) $3
D) $0
E) -$27