Determine the expected return on patricia investment

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Patricia is considering investing in a company's stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment.

                          Probability                        Return

Boom                        0.4                            25.00%

Good                         0.1                           15.00%

Level                         0.2                           10.00%

Slump                        0.3                           -5.00%

Use the table of returns and probabilities above to determine the expected return on Patricia's investment? (Round answer to 3 decimal places, e.g. 0.076.)

Reference no: EM133197292

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