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this information, what is your expectancy on each trade. O $375 $188 O $300 O $600

this information, what is your expectancy on each trade. O $375 $188 O $300 O $600

Essentials Of 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
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You start trading with an account worth $500,000. You decide that the most you want to risk on any trade is 0.50% of the account value. You've been following a stock and believe the appropriate entry point is $40 per share with an 8% trailing stop. Your track record indicates that you have a probability of winning on 40% of your trades with an average win of 15%. When you lose your average loss is 8%. Based on this information, what is your expectancy on each trade. ○ $375 $188 ○ $300 ○ $600
Transcribed Image Text:You start trading with an account worth $500,000. You decide that the most you want to risk on any trade is 0.50% of the account value. You've been following a stock and believe the appropriate entry point is $40 per share with an 8% trailing stop. Your track record indicates that you have a probability of winning on 40% of your trades with an average win of 15%. When you lose your average loss is 8%. Based on this information, what is your expectancy on each trade. ○ $375 $188 ○ $300 ○ $600
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