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yawa3891 [41]
2 years ago
14

You are considering investing in a project with the following possible outcomes: States Probability of Occurrence Investment Ret

urns State 1: Economic boom 18% 20% State 2: Economic growth 42% 16% State 3: Economic decline 30% 3% State 4: Depression 10% -25%
Business
1 answer:
ololo11 [35]2 years ago
5 0

Based on the given states, their probability of occurrence, and the investment returns, the expected return would be 8.72%.

<h3>What is the expected return for this investment?</h3>

This can be found by the formula:

= ∑ (Probability of occurrence x Investment returns if state occurs)

Solving gives:

= (18% x 20%) + (42% x 16%) + (30% x 3%) + (10% x -25%)

= 3.60 + 6.72 + 0.90 - 2.50

= 8.72%

Question:

Find the expected value of the investment.

Find out more on expected value at brainly.com/question/24305645.

#SPJ1

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An investor purchased 100 shares of stock X at \small 6\frac{1}{8} dollars per share and sold them all a year later at 24 dollar
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Answer:

option (C) 280%

Explanation:

Number of shares of stock X purchased = 100

Purchasing cost of share = \$6\frac{1}{8} =\frac{49}{8}

Selling cost of stocks = $24 per share

Brokerage paid = 2%

Now,

The total purchasing cost involved = 100\times\frac{49}{8} + 2% of 100\times\frac{49}{8}

= 612.5 + 0.02 × 612.5

= $624.75

also,

Total income from sales of stocks

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= $24 × 100 - 2% of Total selling cost

= $2400 - ( 0.02 × $2400 )

= $2400 - $48

= $2,352

now,

The investor's percent gain on this investment = \frac{\textup{Income-invested amount}}{\textup{Invested amount}}\times100\%

= \frac{\textup{2,352 - 624.75}}{\textup{624.75}}\times100\%

= \frac{\textup{1727.25}}{\textup{624.75}}\times100\%

= 276.47% ≈ 280%

Hence, the correct answer is option (C) 280%

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If small samples can reveal something that large samples might not, why not just take small samples in every situation?
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