The Probability the Economy Will Boom Is 20 Percent,while It

Multiple Choice

The probability the economy will boom is 20 percent,while it is 70 percent for a normal economy,and 10 percent for a recession.Stock A will return 18 percent in a boom,11 percent in a normal economy,and lose 10 percent in a recession.Stock B will return 9 percent in boom,7 percent in a normal economy,and 4 percent in a recession.Stock C will return 6 percent in a boom,9 percent in a normal economy,and 13 percent in a recession.What is the expected return on a portfolio which is invested 20 percent in Stock A,50 percent in Stock B,and 30 percent in Stock C?

A) 7.40 percent
B) 8.25 percent
C) 8.33 percent
D) 9.45 percent
E) 9.50 percent