Stock A has the following returns for various states of the economy State of the Economy Probability Stock A's Return Recession 9 72 Below Average 16 15 Average 51 16 Above Average 14 35 Boom 10 85 Stock A's expected return is Group of answer choices 13.8 12.7 16.5 9.9

the expected return is 12.7%

Explanation:

The computation of the expected return is given below:

Expected return = Respective probability × respective return

= (-72 × .09) + (-15 × .16) + (16 × .51) + (35 × .14) + (85 × .10)

= -6.48% -2.4% + 8.16% + 4.9% + 8.5%

= 12.68%

= 12.7%

Hence, the expected return is 12.7%

The above formula should be used for the same.

i believe it’s b because the rest don’t make sense

correct, but each time you dont pay the price of the penalty can increase.