Home Grades Personalized Reviews Discussion Course Materials

Home Grades Personalized Reviews Discussion Course Materials Final Exam-Chapters 7-11, 14,16 Back to Assignment Deadline Today at 09 13. Stocks X and Y have the following probability distributions of expected future returns: Probability xY 0.1-10.0%-35.0% 0.22.0% 0.0% 0.4 12.0% 20.0% 0.2 20.0% 25.0% 0.134.0% 45.0% Calculate the expected rate of return,A7A, for Stock X A. 12.20 B11.60 C. 11.20 D. 12.00 Continue without saving Copyright NoticesTerms of Use Privacy Notice Security Notice Accessiblity

Solution

a b c= a*b Probability Expected return Probable return 0.1 -10% -1.00% 0.2 2% 0.40% 0.4 12% 4.80% 0.2 20% 4.00% 0.1 34% 3.40% Expected return 11.60%