You Have Invested in a Project That Has the Following

question 17

Multiple Choice

You have invested in a project that has the following payoff schedule:
What is the expected value of the investment's payoff? (Round to the nearest $1. )

• A)$60
• B)$65
• C)$58
• D)$70

---

Definitions:

Dividend

A portion of a company's earnings that is distributed to shareholders, usually in the form of cash payments or additional shares.

Geometric Average

A method of calculating the average rate of return that accounts for compounding by taking the nth root (where n is the count of numbers) of the product of the values.

Arithmetic Average

A simple mean calculated by adding a set of numbers and dividing the sum by the count of those numbers, used to determine central tendencies.

Arithmetic Average Return

The return earned in an average year over a multi-year period.