Question
Sabina Resources has a claim in the Hackett River of the Northwest Territories that is estimated to contain some 47 million tons of ore rich
Sabina Resources has a claim in the Hackett River of the Northwest Territories that is estimated to contain some 47 million tons of ore rich in silver, zinc, copper, lead, and gold. Hackett River Explorations has staked a claim beside Sabina's and will issue stock to raise funds for test drilling. The table below outlines the various possible outcomes of the test drilling and the associated returns on the stock if you buy some. What is the expected return on the stock if you buy some of the new issue?
States of Nature Probabilities Returns
Nothing of value in claim 0.40 -125%
A small area of ore 0.35 -40%
A large amount of zinc 0.20 55%
A large amount of silver 0.05 325%
The expected return on the stock if you buy some of the new issue is ___%. (Round to two decimal places.)
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