Inferior Goods SpA Equity Is Expected to Earn 14% in a Boom

Multiple Choice

Inferior Goods SpA equity is expected to earn 14% in a boom, 6% in a normal economy, and lose 4% in a recession economy.The probability of a boom is 20% while the probability of a normal
Economy is 55% and the chance of a recession is 25%.What is the expected rate of return on this
Share?

A) 5.10%
B) 6.72%
C) 6.80%
D) 7.60%
E) 11.33%