Terry Owns a Stock That Is Expected to Earn 8

Multiple Choice

Terry owns a stock that is expected to earn 8.7 percent in a booming economy,9.2 percent in a normal economy,and 12.6 percent in a recessionary economy.Each economic state is equally likely to occur.What is his expected rate of return on this stock?

A) 10.38 percent
B) 11.90 percent
C) 10.17 percent
D) 9.98 percent
E) 11.01 percent