BPJ Stock Is Expected to Earn 14

Multiple Choice

BPJ stock is expected to earn 14.8 percent in a recession,6.3 percent in a normal economy,and lose 4.7 percent in a booming economy.The probability of a boom is 20 percent while the probability of a normal economy is 55 percent.What is the expected rate of return on this stock?

A) 6.23 percent
B) 6.72 percent
C) 6.81 percent
D) 7.60 percent
E) 8.11 percent