The following is the daily return schedule for operating various businesses under bad, normal, and good weather. Type of Business Return on Investment Normal Weather Good Weather (Probability 0.25) (Probability = 0.5) 16% -8% 12% 12% 12% 10% 6% 8% Bad Weather (Probability -12% 20% -8% -4% 0.25) Ice Cream Shop Coffee Shap Bikini Shop Cold Drinks Shop Akaldeep has a portfolio consisting of 14% in an Ice Cream Shop, 29% in a Coffee Shop, 14% in a Bikini Shop, and the rest in a Cold Drinks Shop. Determine the expected overall return rate on his investments.
The following is the daily return schedule for operating various businesses under bad, normal, and good weather. Type of Business Return on Investment Normal Weather Good Weather (Probability 0.25) (Probability = 0.5) 16% -8% 12% 12% 12% 10% 6% 8% Bad Weather (Probability -12% 20% -8% -4% 0.25) Ice Cream Shop Coffee Shap Bikini Shop Cold Drinks Shop Akaldeep has a portfolio consisting of 14% in an Ice Cream Shop, 29% in a Coffee Shop, 14% in a Bikini Shop, and the rest in a Cold Drinks Shop. Determine the expected overall return rate on his investments.
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
Related questions
Question
![The following is the daily return schedule for operating various businesses under bad, normal, and good weather.
Type of Business
Return on Investment
Good Weather Normal Weather
(Probability = 0.25) (Probability = 0.5)
12%
10 %
16%
-8%
12%
12%
6%
O a. 6.44%
O b. 6.44%
OC 2.42%
O d. 3.87%
Oe. 7.14%
8%
Bad Weather
(Probability
-12%
20 %
-8%
-4%
0.25)
Ice Cream Shop
Coffee Shop
Bikini Shop
Cold Drinks Shop
Akaldeep has a portfolio consisting of 14% in an Ice Cream Shop, 29% in a Coffee Shop, 14% in a Bikini Shop, and the
rest in a Cold Drinks Shop. Determine the expected overall return rate on his investments.
3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F43db1c21-26d3-473a-8503-cd8e5f43a3f8%2Fd399f9b0-50b1-4b8b-96d2-036a770445ec%2F39u4goe_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following is the daily return schedule for operating various businesses under bad, normal, and good weather.
Type of Business
Return on Investment
Good Weather Normal Weather
(Probability = 0.25) (Probability = 0.5)
12%
10 %
16%
-8%
12%
12%
6%
O a. 6.44%
O b. 6.44%
OC 2.42%
O d. 3.87%
Oe. 7.14%
8%
Bad Weather
(Probability
-12%
20 %
-8%
-4%
0.25)
Ice Cream Shop
Coffee Shop
Bikini Shop
Cold Drinks Shop
Akaldeep has a portfolio consisting of 14% in an Ice Cream Shop, 29% in a Coffee Shop, 14% in a Bikini Shop, and the
rest in a Cold Drinks Shop. Determine the expected overall return rate on his investments.
3
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