Probability Expected Return 0.3 -10% 0.4 5% 0.3 15% If IBM has the probability distribution shown...

Probability Expected Return

0.3 -10%

0.4 5%

0.3 15%

If IBM has the probability distribution shown in the table above, what is IBM’s expected return?

Expert Solution

Expected return = 0.30(-0.10) + 0.40(0.05) + 0.30(0.15)

Expected return = 3.50%

So,

Expected return = 3.50%

jeff jeffy answered 2 years ago

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Probability Expected Return 0.3 -10% 0.4 5% 0.3 15% If IBM has the probability distribution shown...

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Expert Solution

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