You are considering buying a share of stock in a firm that has
the following two possible payoffs with the corresponding
probability of occurring. The stock has a purchase price of $15.00.
You forecast that there is a 30% chance that the stock will sell
for $30.00 at the end of one year. The alternative expectation is
that there is a 70% chance that the stock will sell for $10.00 at
the end of one year. What is the expected percentage return on this
stock, and what is the return variance?
6.67%, 9.17%
84.00%, $9.67
6.67%, 37.33%
1.00%, 93.50%
You are considering buying a share of stock in a firm that has the following two possible payoffs with the corresponding
-
- Site Admin
- Posts: 899603
- Joined: Mon Aug 02, 2021 8:13 am