Delco Accent's stock is expected to earn 12 percent in a normal economy, 18 percent in a strong economy, 25 percent in a booming economy, and lose 10 percent in a recession. The probability of a recession is 20 percent while the probability of a normal economy is 50 percent, the probability of a strong economy is 25 percent, and the probability of a booming economy is 5 percent. What is the expected rate of return on this stock?
A. 10. 24%
B. 9. 75%
C. 11. 81%
D. 8. 85%
