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
qwelly [4]
3 years ago
12

You recently purchased a stock that is expected to earn 12.6 percent in a booming economy, 8.9 percent in a normal economy and l

ose 5.2 percent in a recessionary economy. Each economic state is equally likely to occur. What is your expected rate of return on this stock?
Business
1 answer:
Arisa [49]3 years ago
7 0

Answer:

r(e) = 0.05433 or 5.433% rounded off to 5.43%

Explanation:

To calculate the expected rate of return of a stock, we take the rate of return under each scenario and multiply it with the probability of that scenario and sum up the answers for each scenario. The formula for expected rate of return can be written as follows,

r(e) = pA * rA  + pB * rB  +  ...  +  pN * rN

Where,

  • p represents the probability of each scenario
  • r represents the return under each scenario

As we have 3 scenarios with equal probability for each scenario, we can say the probability of each scenario is 1/3.

r(e) =  1/3 * 0.126  +  1/3 * 0.089  +  1/3 * -0.052

r(e) = 0.05433 or 5.433% rounded off to 5.43%

You might be interested in
Which of the following individuals are required to pay taxes to fund Social Security and Medicare?
Xelga [282]

Answer:

Correct option is (D)

Explanation:

Employees, employers and self employed are supposed to contribute to fund social security and medicare.

Contribution made by each party comes under different categories. Employees contribute to social security and medicare in the the form of FICA taxes which could be withheld by the employers. Employees pay 50 percent and the remaining 50 percent is paid by the employer.

Self employed contribute in the form of self employed taxes.

4 0
3 years ago
Someone add a random question I need it I’ll give brainless it’s just the questions are toooo hard pls
Brut [27]

Answer:

ok go too my profile

Explanation:

5 0
3 years ago
A store has two different coupons that customers can use. One coupon gives the customer $15 off their purchase, and the other co
andrey2020 [161]

Answer:

16.25;

g(f(x)) ;

76 ;

f(g(x))

Explanation:

For 15 off

f(x) = x - 15

For 35% off

g(x) = (1 - 0.35)x = 0.65x

g(x) = 0.65x

A.)

For the $15 off coupon :

f(x) = x - 15

f(x) 40 - 15 = 25

For the 35% coupon :

g(x) = (1-0.35)x

g(x) = 0.65(25)

g(x) = 16.25

B.)

Applying $15 off first, then 35%

Here, g is a function of f(x)

g(f(x))

Here g(x) takes in the result of f(x) ;

For the $140 off coupon :

f(x) = x - 15

f(140) = 140 - 15 = 125

For the 35% coupon :

g(125) = (1-0.35)x

g(124) = 0.65(125) = $81.25

C.)

x = 140

g(x) = 0.65x

g(140) = 0.65(140)

g(140) = 91

f(x) = x - 15

f(91) = 91 - 15

f(91) = 76

D.)

Here, F is a function of g(x)

f(g(x))

f(x) = (0.65*140) - 15

6 0
3 years ago
A trust deed gives the lender a right to request that the trustee perform certain tasks in order to fulfill the terms of the tru
Ganezh [65]

Answer:

Naked Title

Explanation:

The naked title entitles in the title holder to enforce trust to comply with the clauses of the agreement because this right is given to the trustee. Such titles does not possesses any sort of rights of the ownership of asset and its use. So the only purpose includes the tax benefits and the enforcement of the compliance with the clauses of agreements.

4 0
3 years ago
Knowing a process has been tested and works well is valuable to companies as they
alex41 [277]

Answer:trandemarked

Explanation:

3 0
2 years ago
Other questions:
  • Jasper Company has a defined benefit pension plan. Effective at the beginning of the current year, the company retroactively ame
    8·1 answer
  • Difference between bench trial and jury trial
    13·2 answers
  • Denny Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or thr
    9·1 answer
  • Expenditures that add to the utility of fixed assets for more than one accounting period are
    12·1 answer
  • Bart becomes very angry at Maria for doubting the soundness of his plan for investment because, after all, he is an investment s
    15·1 answer
  • Which of the following is true regarding positive organizational scholarship? a. It involves monitoring negative practices in or
    10·1 answer
  • A __________ visually shows that the total revenue curve and the total cost curve intersect at a point of zero profit.
    12·1 answer
  • Which of the following statements is most correct? a. All else equal, if a bond’s yield to maturity increases, its price will fa
    8·1 answer
  • What is the importance of the Define Phase in terms of its placement in the DMAIC method?
    5·1 answer
  • Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!