Based on the following probability distribution, what is the security’s expected return? State Pr

Question

Question

Based on the following probability distribution, what is the security’s expected return?

State Probability r___

1 0.2 -5.0%

2 0.3 10.0

3 0.5 30.0

business finance

Answer 1

Answer #1

state of economyReturns probability Expected return 5% 10% 30% (Return x probability) 1.000% 3.000% 15.000% 1 0.20 0.30 0.50 2 Expected return 17.0%

Answer 2

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