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Given the following probability distribution, what is the expected return for Security J? (Expresss your answer...

Given the following probability distribution, what is the expected return for Security J? (Expresss your answer in percentage, but do not include the percent sign, %, and round it to two decimal place, i.e., 14.67) State Pi rJ 1 0.1 7% 2 0.5 11% 3 0.4 20%

Solutions

Expert Solution

Expected return = Probability * Return

Expected return = (0.1 * 0.07) + (0.5 * 0.11) + (0.4 * 0.20)

Expected return = 0.1420 or 14.20%

jeff jeffy answered 2 years ago
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