An investment has a 25% probability of earning an 8% return, and a 75% chance of...

Question

Question

business economics

Answer 1

Answer #1

9.5%

Expected return

= R1P1 + R2P2 +.....+RnPn

R = Return expenctation in the given scenario

P = Probablity of that expected return

n = No. of scenario

= 25% * 8% + 75% * 10%

= 2% + 7.5%

= 9.5%

Answer 2

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