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< 1-You are considering an investment costing $10,000, for which the future cash flows from owning the security depend on the state of the
< 1-You are considering an investment costing $10,000, for which the future cash flows from owning the security depend on the state of the economy as estimated in this table. In any given year the investment could produce any one of three possible cash flows, depending on the particular state of the economy. State of the economy Economic Probability of the states Cash flow from the investment % Return 25% $1,400 14% Recession Moderate 35% $1,700 17% Economic Growth Strong Economic 55% $2000 20% Growth Requirements: By following above information calculate- a- Expected cash flow b- Expected rate of return
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