Given the Following Probability Distributions,what Are the Expected Returns for the Market

question 34

Multiple Choice

Given the following probability distributions,what are the expected returns for the Market and for Security J? State 1 P1 = 0.2 Km = -10% Kj = 40% : State 2 P1 = 0.5 Km = 10% Kj = -20% : State 3 P1 = 0.3 Km = 30% Kj = 30%

• A) 10.0%; 13.0%
• B) 9.5%; 13.0%
• C) 10.0%; 11.3%
• D) 12.0%; 7.0%
• E) 10.0%; 9.5%

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Definitions:

Income Tax Expense

The cost associated with the taxes on a company's taxable income, reflecting the amount of income tax a company expects to pay to the government.

Income Taxes Payable

The sum of income tax that a corporation is liable to pay to the government but has not paid so far.

Cash Payments

Transactions involving the transfer of cash from one entity to another as a form of compensation or settlement.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for a fixed asset since it was put into use.