For an Investment in a Stock, the Probability of the Return

question 65

Multiple Choice

For an investment in a stock, the probability of the return being -10.0% is 0.3, 10.0% is 0.4, and 30.0% is 0.3. Given the probability distributions, what is the expected rate of return for the investment?

• A) 10.0%
• B) 9.5%
• C) 15.0%
• D) 12.5%
• E) 13.0%