Assume that there are three possible states of the economy: poor, moderate and booming. XYZ Corp expects to have $350,000 in sales in a poor economy, $500,000 in a moderate economy, and $900,000 in a booming economy. If the chances of a booming economy and poor economy are 10% each, what is the expected amount of sales for XYZ?

A. $500,000B. $512,500C. $525,000D. $621,000E. $805,0008.

Assume a fair coin and consider the following bet: heads I pay you two dollars, tails Which of the following statements is (are) correct?

A. $0B$0.50C. $0.50D.$1.00E. $1.00

Which of the following statements is (are) correct?

(x)Financial leverage is the use of debt to increase an investment position and increased financial leverage by a firm can increase the level of firm specific risk (unsystematic risk) for that business.

(y)Firms can quite possibly change their stocks' risk level by substantially changing their business.

(z)If a firm takes on less risky new projects over time, the firm itself will become more risky.

A.(x), (y) and (z)B.(x) and (y) onlyC.(x) and (z) onlyD.(y) and (z) onlyE.(z) only