What is expected rate of return on this stock

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Reference no: EM131618176

PL Lumber stock is expected to return 22 percent in a booming economy, 15 percent in a normal economy, and lose 2 percent in a recession. The probabilities of an economic boom, normal state, or recession are 5 percent, 92 percent, and 3 percent, respectively. What is the expected rate of return on this stock?

14.84 percent

14.23 percent

14.51 percent

15.47 percent

15.26 percent

Reference no: EM131618176

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