A stock is expected to return 22% in a normal economy, return 30% if the economy booms, and lose 19% if the economy moves into a recessionary period. Economists predict a 65% chance of a normal economy, a 25% chance of a boom, and a 10% chance of a recession. What is the expected return on the stock?
Multiple Choice
a. 20.03%
b. 20.78%
c. 20.86%
d. 19.90%
