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Calculating Expected Rate of Return (20 points) Rate of Return (r) Stock X Probability (p) Optimistic 14% 26 % or 0.26 The Economic Most

    

Calculating Expected Rate of Return (20 points) Rate of Return (r) Stock X Probability (p) Optimistic 14% 26 % or 0.26 The Economic Most Likely 11 % 70% or 0.70 Status Pessimistic -8% 4% or 0.04 Calculate the Expected Rate of Return E(r) for Stock X.

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The Expected Rate of Return Er is calculated using the formula Erp1r1 P2 2 P3 13 Pn x ... blur-text-image

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