Question: Learning objective: Calculate the expected return on a single period investment. you invest $500 in a stock that has a 30% chance of a 40%

Learning objective: Calculate the expected return on a single period investment.
you invest $500 in a stock that has a 30% chance of a 40% return, a 50% chance of a 6% return and a 20% chance of a 12% return.
What is your expected return after one year?
A. 6.6%
B. 5.8%
C. 7.2%
D. 8.0%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!