What Is the Expected Return on a Stock with a Guaranteed

question 186

Multiple Choice

What is the expected return on a stock with a guaranteed dividend of $3 if there is a 30-percent chance its price could rise by 50 percent, a 30-percent chance its price could fall by 50 percent, and a 40-percent chance its price could stay constant at the present price of $60 per share?

• A)$60
• B)$33
• C)$3
• D)$0
• E)-$27

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Definitions:

Antagonists

Substances that block or dampen a biological response by binding to and inhibiting the function of a receptor.

Neurotransmitters

Chemical substances that transmit signals across a synapse from one neuron to another, facilitating neuronal communication.

Axons

Long nerve fibers that are part of neurons, responsible for transmitting electrical impulses away from the neuron's cell body.

Action Potentials

Brief electrical impulses that are the means by which information is transmitted along neurons and across synapses.