You are considering buying stock A. If the economy grows rapidly, you may earn 30 percent on

Question:

You are considering buying stock A. If the economy grows rapidly, you may earn 30 percent on the investment, while a declining economy could result in a 20 percent loss. Slow economic growth may generate a return of 6 percent. If the probability is 15 percent for rapid growth, 20 percent for a declining economy, and 65 percent for slow growth, what is the on this investment?
Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...