1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Thepotemich [5.8K]
3 years ago
7

You recently purchased a stock that is expected to earn 20 percent in a booming economy, 15 percent in a normal economy, and los

e 2 percent in a recessionary economy. There is 21 percent probability of a boom, 72 percent chance of a normal economy, and 7 percent chance of a recession. What is your expected rate of return on this stock
Business
1 answer:
ICE Princess25 [194]3 years ago
8 0

Answer:

Expected rate of return on stock is 14.86%

Explanation:

The expected rate of return of a stock is the mean return that is expected to be earned by the stock considering the different scenarios that can occur, the return in these scenarios and the probability of the occurrence of these scenarios. The formula for expected rate of return of stock is,

rE = pA * rA  +  pB * rB  +  ...  + pN * rN

Where,

  • pA, pB, ... represents the probability that scenario A, B and so on will occur or the probability of each scenario
  • rA, rB, ... represents the return in scenario A, B and so on

rE = 0.21 * 0.2  +  0.72 * 0.15  +  0.07 * -0.02

rE = 0.1486 or 14.86%

You might be interested in
The following is an example of what type of group norm?
SCORPION-xisa [38]

Answer:

Procedural Group Norm.

Explanation:

The group norms are a set of guidelines that enables the group work according to them. These norms enables a group to work in a systemmaized manner and order.

The procedural group norms are those groups that follows the procedure of functioning. The procedural norms suggests that how a task will be carried out and what to do the next. This group consists of several procedural roles such as facilitator, recorder, etc.

The stated type of group exemplifies the 'procedural group norms.' As the guidelines are set for the group to first complete their individual tasks and then help other's who have not done their tasks.

So, the correct answer is the second option.

8 0
3 years ago
What is an advantage of using a comparsion method of assesment ?
stepan [7]
B (sorry if its wrong!!)
5 0
2 years ago
What made Americans so willing to engage in stock market speculation in the 1920s? People were in an optimistic mood, and they w
labwork [276]
I believe the answer is: Speculation helped many low-income people move to the middle class. 

Due to the early development of industrial economy in the 1920s, the stock market experienced a period where most of company's value keep increasing over several years forward. This make a lot of people manage to grow their investment very quickly and obtain a lot of wealth.
8 0
3 years ago
Read 2 more answers
Identify whether the following paragraph uses a direct, indirect, or semi-indirect organizational pattern.
Anna007 [38]

Answer:

Correct answer is B that is <u>Indirect Organizational Pattern</u>

6 0
3 years ago
Read 2 more answers
Please help me with this!!
Westkost [7]
The correct answer is Neutral stance
8 0
2 years ago
Other questions:
  • An owner withdrawal of $20,000 would_______.
    13·1 answer
  • The united states exports corn and aircraft to the rest of the world and it imports oil and clothing from the rest of the world.
    6·2 answers
  • One of the biggest benefits of a market-based economy is
    11·1 answer
  • What is the Current Ratio given the following information?
    12·2 answers
  • A loan officer will use _____ to determine if you will be approved for a loan
    12·2 answers
  • Warren opened a new computer store in town. When customers purchase a computer from his store, they automatically receive an ext
    14·1 answer
  • TCost-908 Car Mechanic Inc. uses a job-order costing system. The company applies all of its overhead costs to jobs using a prede
    12·1 answer
  • Lindon Company is the exclusive distributor for an automotive product that sells for $54.00 per unit and has a CM ratio of 30%.
    14·1 answer
  • The purpose of growth accounting is to estimate the contribution each component of the aggregate production function makes to ov
    12·1 answer
  • What is a good camera for vlogging and how much does it cost? I'm looking something for 1,000 and under.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!