FIN 357- The common stock of Lester Lithographics is expected

FIN 357- The common stock of Lester Lithographics is expected

Subject: Business    / Finance
Question
The common stock of Lester Lithographics is expected to earn 9 percent in a recession, 7 percent in a normal economy, and lose 2 percent in a booming economy. The probability of a boom is 5 percent while the probability of a recession is 50 percent. What is the expected rate of return on this stock?
7.00 percent
7.55 percent
7.75 percent
8.05 percent
8.65 percent