Consider the following information Calculate the expected re

Consider the following information:

Calculate the expected return.

State of Economy	Probability of State of Economy	Rate of Return if State Occurs
Recession	.27	?	.11
Boom	.73		.23

Expected return = Probability * rate of return

Expected return = 0.27 * ( -0.11) + 0.73 * 0.23

Expected return = -0.0297 + 0.1679

Expected return = 0.1382 or 13.82%