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Expected return on Barbara's investment

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Question;Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Using the table of returns and probabilities below, findProbability Return________________________________________Boom 0.2 25.00%Good 0.6 15.00%Level 0.1 10.00%Slump 0.1 -5.00%________________________________________What is the expected return on Barbara's investment?

 

Paper#50699 | Written in 18-Jul-2015

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