Ronnie Estimates That There Are Three Possible Return Outcomes for a Stock

question 74

Multiple Choice

Ronnie estimates that there are three possible return outcomes for a stock he is considering for purchase.He thinks that there is a 45% chance the economy will boom and his stock will return 25%,a 50% chance the economy will continue at its current pace and the stock will return 8%,and finally,that there is a 5% chance that the economy will falter and the expected return on his stock will be -10%.Given these probabilities and conditional expected returns,what is Ronnie's expected return on the stock he is considering for purchase?

• A)8.00%
• B)11.25%
• C)14.75%
• D)15.25%

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A paper-and-pencil test with questions about a person’s thoughts, feelings, and behaviors, which measures several dimensions of personality and can be scored according to a standard procedure.

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A type of psychological test designed to let a person respond to ambiguous stimuli, potentially revealing hidden emotions and internal conflicts.

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