Freedman Flowers' Stock Has a 50% Chance of Producing a 25

question 44

Multiple Choice

Freedman Flowers' stock has a 50% chance of producing a 25% return, a 30% chance of producing a 10% return, and a 20% chance of producing a −28% return.What is the firm's expected rate of return?

• A) 9.41%
• B) 9.65%
• C) 9.90%
• D) 10.15%
• E) 10.40%