In: Finance
(Expected return and risk) The following data represend returns for the common stocks over a one-year period.
The mean (expected) return of Google is _______%. (Keep the sign and two decimal numbers.)
Mean expected return of Google -
P1*ER1+ P2*ER2+...Pn*ERn
Probability - P
Expected return - ER
= (0.1 *-0.2)+(0.2*0.08)+(0.2*0.34)+(0.3*-0.18)+(0.2*0.04)
=-0.02+0.016+0.068-0.054+0.008
=0.058 =5.8%
Mean expected return for Google is 5.8%
Mean expected return for Google is 5.8%