Exhibit 6-13
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{cc}\text { Probability } & \text { Return } \\\hline 0.10 & -.20 \\0.25 & -.05 \\0.40 & 0.15 \\0.25 & 0.30\end{array}$

question 47

Multiple Choice

Exhibit 6-13
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
A financial analyst covering Magnum Oil has determined the following four possible returns given four different states of the economy over the next period. $\begin{array}{cc}\text { Probability } & \text { Return } \\\hline 0.10 & -.20 \\0.25 & -.05 \\0.40 & 0.15 \\0.25 & 0.30\end{array}$
-Refer to Exhibit 6-13. Calculate the expected return for Magnum Oil.

• A) 5.0
• B) 10.3%
• C) 13.7%
• D) 17.5%
• E) 20.0%

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