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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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