Tourism is considered to be an export industry

Determination of safety stock involves a trade-off between the risk of a stock-out and increased

costs of carrying additional inventory. Indicate whether the statement is true or false

Ronnie estimates that there are three possible return outcomes for a stock he is considering for purchase

He thinks that there is a 45% chance the economy will boom and his stock will return 25%, a 50% chance the economy will continue at its current pace and the stock will return 8%, and finally, that there is a 5% chance that the economy will falter and the expected return on his stock will be -10%. Given these probabilities and conditional expected returns, what is Ronnie's expected return on the stock he is considering for purchase? A) 8.00% B) 11.25% C) 14.75% D) 15.25%