An investor estimates that there is a 1 in 10 chance that a stock purchase will lose
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An investor estimates that there is a 1 in 10 chance that a stock purchase will lose 20% of its value, a 2 in 10 chance that it will break even, a 4 in 10 chance that it will gain 15%, and a 3 in 10 chance that it will gain 30%. What is the expected return based on these estimates?
Expected ReturnThe 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...
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Related Book For 
Business Analytics Methods Models and Decisions
ISBN: 978-0321997821
2nd edition
Authors: James R. Evans
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