Problem:
Compute the expected return given these four economic states, their likelihoods, and the potential returns. Fast Growth state: Probability=0.4, Return=50%. Slow Growth State: Probability=0.4, Return=10%. Recession State: Probability=0.1, Return= -10%. Depression State: Probability=0.1, Return= -5%.
6.71%
21.65%
22.50%
52.20%
Explain in detail and also provide full explanation.