The Probabilities of Different Returns on a Stock Over the Year

question 95

Multiple Choice

The probabilities of different returns on a stock over the year are: $$\begin{array} {cc } \text { Probability } & \text { Return } \\10 \% & - 5 \% \\15 \% & 0 \% \\20 \% & 5 \% \\30 \% & 10 \% \\25 \% & 20 \%\end{array}$$
The expected return on the stock is_____ percent.

• A)8.5
• B)9.0
• C)9.5
• D)10.0

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Definitions:

Monthly Interest Rate

The interest rate charged or earned, expressed on a monthly basis, typically used for loans or investments.

Monthly Interest Rate

It's the interest rate applied each month on loans, savings, or investments, calculated by dividing the annual interest rate by 12.