Question

8.) There are three assets to be considered: stocks, bonds, and commodities. The current prices of these assets are listed below:

Asset	Current Price
Stocks	$500
Bonds	$1000
Commodities	$200

The following table lists the possible prices of these assets a year from today, with the corresponding probabilities.

Stocks		Bonds		Commodities
Probability	Price	Probability	Price	Probability	Price
0.25	$700	0.4	$1100	0.2	$250
0.25	$650	0.6	$1050	0.25	$240
0.25	$600			0.25	$230
0.25	$550			0.3	$220

What is the expected return (in %) of stocks? Round your answer to at least 2 decimal places.

Answer 1

Answer:-

The expected return of stocks is $ 625 %

Thanks dear student.