If a Stock Analyst Believes There Is a 10% Probability

question 23

Multiple Choice

If a stock analyst believes there is a 10% probability that the stock price of Dymonatis will be $30 at the end of the year,a 50% probability that it will be $40,and a 40% probability that it will be $50,then the expected value of the stock at the end of the year is:

• A)$32.
• B)$38.
• C)$40.
• D)$43.

---

Definitions:

Communication

The process of exchanging information, ideas, thoughts, and feelings through spoken words, writing, signals, or behavior.

Mirror Image Rule

A principle in contract law that demands an acceptance must exactly match the terms of the offer for a valid contract to be formed.

Commercial Transactions

The exchange of goods, services, or funds in a business context, often governed by legal regulations and agreements.

Strictly Applied

Refers to the rigorous enforcement or adherence to rules, laws, or principles without deviation or exception.