The following table is an analyst's best guess for the likelihood of various states of the economy next year and the corresponding return on the stock of EFG Corp. State of the Expected Return Economy Probability (%) Ideal 0.2 20.0 Good 0.4 15.0 Fair 0.3 8.0 Poor 0.1 -10.0 What is the expected percentage rate of return on EFG Corp. stock? Group of answer choices 3.4 10.4 10.8 11.4 not enough information
The following table is an analyst's best guess for the likelihood of various states of the economy next year and the corresponding return on the stock of EFG Corp. State of the Expected Return Economy Probability (%) Ideal 0.2 20.0 Good 0.4 15.0 Fair 0.3 8.0 Poor 0.1 -10.0 What is the expected percentage rate of return on EFG Corp. stock? Group of answer choices 3.4 10.4 10.8 11.4 not enough information
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
The following table is an analyst's best guess for the likelihood of various states of the economy next year and the corresponding return on the stock of EFG Corp.
|
State of the |
Expected Return |
|
|
Economy |
Probability |
(%) |
|
Ideal |
0.2 |
20.0 |
|
Good |
0.4 |
15.0 |
|
Fair |
0.3 |
8.0 |
|
Poor |
0.1 |
-10.0 |
What is the expected percentage
Group of answer choices
3.4
10.4
10.8
11.4
not enough information
Expert Solution
Step 1
|
Economy |
Probability |
(%) |
|
Ideal |
0.2 |
20.0 |
|
Good |
0.4 |
15.0 |
|
Fair |
0.3 |
8.0 |
|
Poor |
0.1 |
-10.0 |
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