An analyst estimates there is a probability of 18 percent that there will be a recession next year. He thinks the probability of things being normal is three times the probability of a recession, with the remaining probability assigned to a boom taking place. A stock is expected to return -12 percent in a recession, 10 percent under normal conditions and 24 percent if there is a boom. What is the expected return (in percent) on this stock? Answer to two decimals, carry intermediate calcs. to four decimals.

An analyst estimates there is a probability of 18 percent that there will be a recession next year. He thinks the probability of things being normal is three times the probability of a recession, with the remaining probability assigned to a boom taking place. A stock is expected to return -12 percent in a recession, 10 percent under normal conditions and 24 percent if there is a boom. What is the expected return (in percent) on this stock? Answer to two decimals, carry intermediate calcs. to four decimals.

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Similar questions

An ectopic pregnancy is twice as likely to develop when the pregnant woman is smoker compared to when she is a non-smoker. If 32 percent of women of childbearing age are smokers, what percentage of women who have ectopic pregnancies are they smokers? A. 0.4848
From 2000 to 2023, the number of people in Virginia (in millions) can be modeled by P=0.08x+6.97 where x = 0 corresponds to the year 2000. What is the expected population in 2019
The probability of drawing a peppermint candy out of a jar of 25 candies is 1/5.How many more peppermint candies should be added to the jar in order to increase the probability of drawing a peppermint candy to 1/3?
What is the probability of being dealt two kings in a row from a deck of cards without replacing the first card drawn? Leave your answer as a percent to the nearest tenth (one decimal) after converting to %. You can leave out the % sign.
The probability of an alarm clock failing is 4.7%. What is the probability of two such alarm clocks failing? Show the calculation you did to get your answer and express it as a 3-place decimal.
Please walk through all steps used to appropriatly enter the data using TI-84 calculator?
A booth at the school carnival prepared 30 grab bags offered for sale for $3.00 a bag. Ten bags contain merchandise worth $1.00. Eight bags contain merchandise worth $2.00, and twelve bags contain merchandise worth $3.00. You purchase one bag. What is your expected gain or loss?
You buy a lottery ticket that costs $20. There are only 100 tickets available to be sold in this lottery. There are three $500 prizes, 4 $100 prizes, and 10 $20 prizes. Find your expected gain or loss. Round your answer to 2 decimal places. Please do not include the dollar sign in your answer (Ctrl) -
Suppose you are producing an outdoor festival. You estimate that you will make $200000 if it does not rain and make $45000 if it does rain. The weather bureau predicts that the chance of rain is 26% for the day of the concert. What are your expected earnings for the festival?
Solve all four parts
Answer this step by step and justify your solution ASAP
Previously, De Anza's statistics students estimated that the amount of change daytime statistics students carry is exponentially distributed with a mean of $0.88. Suppose that we randomly pick 25 daytime statistics students. Find the probability that an individual had between $0.80 and $1.00. Graph the situation, and shade in the area to be determined.