Suppose There's a 50% Chance of a Stock Rising by 20

question 88

Multiple Choice

Suppose there's a 50% chance of a stock rising by 20% and a 50% chance of it falling by 20%.What is the expected rate of return on the stock?

• A) -20%
• B) 0%
• C) 10%
• D) 20%

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Definitions:

Electric Bill

A monthly statement that accounts for the consumption of electricity and the cost associated with it.

Variable Expense

Costs that change in amount from one period to another, affected by various factors like usage or market conditions.

Recurring Expense

An ongoing financial cost that repeats at regular intervals, such as monthly or yearly.

Variable Expense

Costs or expenses that change in proportion to business activity.