You invest $3,000 in a stock that has a 10% chance of a 2% return, a 70%

Fantastic news! We've Found the answer you've been seeking!

Question:

You invest $3,000 in a stock that has a 10% chance of a 2% return, a 70% chance of a 6% return and a 20% chance of a 15% return.

What is your expected return after one year?

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

See More Books

Posted Date: Apr 27, 2023 01:21 AM

See More Questions

You receive an investment newsletter advertisement in the mail. The letter claims that you should invest in a stock that has doubled the return of the S&P 500 Index over the last three months. It...
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
Question 4: What is meant by statistical versus nonstatistical and probabilistic versus nonprobabilistic sample selection?
Using Bond Quotes Suppose the following bond quotes for IOU Corporation appear in the financial page of today??s newspaper. Assume the bond has a face value of $1,000 and the current date is April...
List eight essential properties that influence usability and effectiveness analysis models. Give brief description for each property.
The income statement format that shows important subtotals is referred to as a. a classified income statement. b. a single-step income statement. C. a multi-step income statement, d. a subtotaled...
The Farmyard Gate A gate 4.00 m wide and 2.00 m high weighs 500 N. Its center of gravity is at its center, and it is hinged at A and B. To relieve the strain on the top hinge, a wire CD is connected...
SunnyVale Trailer Park has a free cash flow of $500 000. The company pays a 30% tax rate. Interest on debt, which accounts for 40% of its capital structure, is 6%. The beta for its common stock is...
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
High Roller Properties is considering building a new casino at an after-tax cost of $10.0 million at t = 0. The after-tax cash flows the casino generates will depend on whether the state imposes a...
Below are amounts (in millions) from three companies' annual reports. Beginning Accounts Receivable Ending Accounts Receivable Net Sales WalCo TarMart CostGet $1,815 6,166 629 $2,762 6,694 $322,427...
In order to better understand the impact weather has on the insurance industry in Canada, it helps to understand the event from different perspectives. How will the event impact our economy, what are...
1. Is the proposal accretive? If so, in which year does it first become accretive, and by what percentage (vs. standalone prior valuation expectation)? Show some sensitivities around this analysis. ...
What is margin? Do you plan to use margin as a part of your investment strategy? How do you plan to use margin as a part of your investment strategy?
a) Ram Corporation Ltd is a listed company. The firms' CFO has gathered data (06Marks) for 6 M performing the valuation using the Free Cash Flow Model. The firms' WACC is 12% and it has Rs.14,00,000...
Compare the https://www.espn.com/ and https://www.espn.com/espnw/ What differences do you notice? What are the differences in the quality and tone of the two sites? What do you notice about the...
1) The government decided to reduce taxes on fast-food to increase revenue. The government assumes that fast-food products have a) An inelastic demand b) An elastic demand c) A demand curve that is...
Brian and Kim have a 12-year-old child, Stan. For 2012, Brian and Kim have taxable income of $52,000, and Stan has nonqualifying dividend income of $4,500 and investment expenses of $250. No election...
On July 1, 2012, Ted, age 73 and single, sells his personal residence of the last 30 years for $365,000. Ted's basis in his residence is $35,000. The expenses associated with the sale of his home...
Matthew borrows $250,000 to invest in bonds. During 2012, his interest on the loan is $30,000. Matthew's interest income from the bonds is $10,000. This is Matthew's only investment income. a....
Show that $\left(\frac{\partial C_{P}}{\partial P} ight)_{T}=\frac{6 B}{T^{3}}$ for a gas obeying the equation of state $V=\frac{R T}{P}+A-\frac{B}{T^{2}}$. [Hint: We know that...
What are principal coordinates? What is their use?
Define these terms: mass coupling, velocity coupling, elastic coupling.

You invest $3,000 in a stock that has a 10% chance of a 2% return, a 70%

Question:

Expert Answer:

To calculate the expected return we need to multiply each pos... View the full answer

Income Tax Fundamentals 2013

Students also viewed these finance questions