Question
An investor is trying to estimate his expected return on an investment in the next 12 months. He believes the economy will be one of
An investor is trying to estimate his expected return on an investment in the next 12 months. He believes the economy will be one of three states: Bad, Average, or Great. He has estimated the probability of each state and the return he will get in each environment.
| OUTCOME: | Probability | Return |
|---|---|---|
| BAD | 0.36 | -16.00% |
| AVERAGE | 0.43 | 4.00% |
| GREAT | 0.21 | 34.00% |
Find the expected return based on his assumptions.
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Get Funded The Startup Entrepreneurs Guide To Seriously Successful Fundraising
Authors: John Biggs, Eric Villines
1st Edition
1260459063, 978-1260459067
