If the Probability of a 20% Return Is 70% and the Probability

question 21

Multiple Choice

If the probability of a 20% return is 70% and the probability of a 4% loss is 30%,what is the expected return to the nearest whole percentage?

• A) 17%
• B) 3%
• C) 13%
• D) 15%
• E) 11%

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Definitions:

Capital Stock

Capital stock is the total amount of physical, non-consumable goods, or financial assets that a company uses for production of goods or services, including buildings, machinery, and equipment.

Investment Project

A specific plan or initiative undertaken by a business or organization involving capital investment aimed at achieving certain financial or strategic goals.

Interest

The cost paid by a borrower for the use of borrowed money, or the income earned by an investor on their investment.

Inventory

The total amount of goods and materials held in stock by a business, intended for sale or production purposes.