Probability distributions and rate of returns for Celecom Bhd. and Pos Selaju Bhd. State of Economy Probability of the States Return (%) Celecom Bhd. Return (%) Pos Selaju Bhd. Boom 0.30 25 40 Normal 0.50 20 10 Recession 0.20 15 20 (i) Solve for the expected rate of return for Celecom Bhd. and Pos Selaju Bhd. shares. (ii) In your opinion, which share is more worth the profit for investment and why?
Probability distributions and rate of returns for Celecom Bhd. and Pos Selaju Bhd. State of Economy Probability of the States Return (%) Celecom Bhd. Return (%) Pos Selaju Bhd. Boom 0.30 25 40 Normal 0.50 20 10 Recession 0.20 15 20 (i) Solve for the expected rate of return for Celecom Bhd. and Pos Selaju Bhd. shares. (ii) In your opinion, which share is more worth the profit for investment and why?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Answer the following questions based on the given information from table of probability
distributions and rate of
Pos Selaju Bhd. shares below:
Table 2: Probability distributions and rate of returns for Celecom Bhd. and Pos Selaju
Bhd.
State of Economy Probability of the States Return (%)
Celecom Bhd.
Return (%)
Pos Selaju Bhd.
Boom 0.30 25 40
Normal 0.50 20 10
Recession 0.20 15 20
(i) Solve for the expected rate of return for Celecom Bhd. and Pos Selaju Bhd.
shares.
(ii) In your opinion, which share is more worth the profit for investment and why?
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