Presume you are investing your life savings in one stock. If there is a 50% chance that the stock would be worthless in one year, what rate of return would you require in order to buy that stock? How would that be different if you were only risking half of your life savings?

Answer rating: 100% (QA)

Considering Risk and Return Since youre risking your entire life savings on a single stock with a 50 chance of becoming worthless you would require a ... View the full answer