You Recently Purchased a Share That Is Expected to Earn

Multiple Choice

You recently purchased a share that is expected to earn 12% in a booming economy,8% in a normal economy and lose 5% in a recessionary economy.There is a 15% probability of a boom,a 75% chance of a normal economy,and a 10% chance of a recession.What is your expected rate of return on this share?

A) 5.00%
B) 6.45%
C) 7.30%
D) 7.65%
E) 8.30%