Homework Help is Here – Start Your Trial Now!
Business
Finance
Use the following information to answer the question.    Based on above data, determine the expected return? Select one: a. 12.06% b. 19% c. 17.35% d. 16.72%

Use the following information to answer the question.    Based on above data, determine the expected return? Select one: a. 12.06% b. 19% c. 17.35% d. 16.72%

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
See similar textbooks
icon
Related questions
Question
Use the following information to answer the question. 

 

Based on above data, determine the expected return?

Select one:
a. 12.06%
b. 19%
c. 17.35%
d. 16.72%
Outcome Probability Return Recession 20% -20% Expansion 25% 15% Boom 55% 35%
Transcribed Image Text:Outcome Probability Return Recession 20% -20% Expansion 25% 15% Boom 55% 35%
Expert Solution
Step 1

Given information :

Outcome  Probability  Return
Recession  20% -20%
Expansion 25% 15%
Boom 55% 35%

The expected return will be the sum of the products of all the actual returns in each of the scenario taking probability into consideration. 

steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS