Suppose Microsoft Stock Will Provide Either a Return of 10

question 29

Multiple Choice

Suppose Microsoft stock will provide either a return of 10 or 20 percent over the next year and that the probability of the former outcome is 0.25 while the probability of the latter is 0.75.The expected return on Microsoft stock over the next year is thus _____%.

• A)15
• B)12.5
• C)17.5
• D)20