A company stock has a 50% chance of producing a 30% return, a 25% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return?
A company stock has a 50% chance of producing a 30% return, a 25% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 4P: An analyst has modeled the stock of a company using the Fama-French three-factor model. The market...
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A company stock has a 50% chance of producing a 30% return, a 25% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return ?
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