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A company wants to demonstrate their newest car model at a company event. They aren't sure how the event will go and, as a result,

A company wants to demonstrate their newest car model at a company event. They aren't sure how the event will go and, as a result, how the new model will be perceived.

An analyst has projected the following outcomes:

Outcome Stock Return Probability
Success 15% 0.50

Minor Problems

2% 0.20
Failure -5% 0.30

What is the expected shareholder return for this venture?

a) 5.20%

b) 6.40%

c) 4.75%

d) 8.09%

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