Inferior Goods SpA Equity Is Expected to Earn 14% in a Recession,6

Multiple Choice

Inferior Goods SpA equity is expected to earn 14% in a recession,6% in a normal economy,and lose 4% in a booming 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) 6.00%
B) 6.72%
C) 6.80%
D) 7.60%
E) 11.33%