Question
If the required return from an asset is 10%, and the asset has a 60% probability of yielding a 20% return and a 40% probability
If the required return from an asset is 10%, and the asset has a 60% probability of yielding a 20% return and a 40% probability of earning a 5% return, you should
a. forgo the investment opportunity since the expected return of 14% is too low.
b .buy the asset because the expected return of 32% exceeds the required return.
c .buy the asset because the expected return of 12.5% exceeds the required return.
d. not acquire the asset since the expected return of 32% exceeds the required return.
e. purchase the asset since the expected return of 14% exceeds the required return.
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