Compute the Expected Return Given These Three Economic States, Their

question 38

Multiple Choice

Compute the expected return given these three economic states, their likelihoods, and the potential returns:
$$\begin{array}{l}\begin{array} { c c r } \text { Eccrorric State }&\text { Probability } & \text { Return } \\\text { fast growth }&0.2 & 23 \% \\\text {slow growth }&0.6 & 14\% \\\text { recession }&0.2 & - 30\%\\\end{array}\end{array}$$

• A) 3.5 percent
• B) 7.0 percent
• C) 7.5 percent
• D) 12.5 percent

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Definitions:

Control System

Procedures and tools designed to monitor performance, compare it with goals, and take corrective action as necessary to ensure the achievement of strategic objectives.

Customer Needs

The recognized necessities or desires that consumers look to fulfill through purchasing products or services.

Six Sigma

A set of techniques and tools for process improvement, aiming at reducing defects and variability in manufacturing and business processes.

Dissatisfied Customers

Individuals who are unhappy or frustrated with the goods or services received from a business.