Crabby Shores stock is expected to return 15.7 percent in a booming economy, 9.8 percent...
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Crabby Shores stock is expected to return 15.7 percent in a booming economy, 9.8 percent in a normal economy, and 2.3 percent in a recession. The probabilities of an economic boom, normal state, or recession are 15 percent, 73 percent, and 12 percent, respectively. What is the expected rate of return on this stock?
A. 10.74 percent
B. 9.79 percent
C. 8.68 percent
D. 10.07 percent
E. 10.61 percent
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