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Stock AAA has the following probability distribution: If economy is good (the probability is 30%), its expected stock return is 30%; if economy is on

Stock AAA has the following probability distribution: If economy is good (the probability is 30%), its expected stock return is 30%; if economy is on average (the probability is 40%), its expected stock return is 10%; if economy is bad (the probability is 30%), its expected return is -10%. Find the expected rate of return for stock AAA

4.0%

6.0%

10.0%

14.0%

You are contributing money to an investment account so that you can purchase a car in five years. You plan to contribute six payments with $2,000 each year. The first payment will be made today (t = 0), and the final payment will be made five years from now (t = 5). If you earn 8% in your investment account, how much will you have in the account six years from now (t= 6)? Note: This is an annuity due problem.

$15,721.3

$15,845.6

$16,843.2

$17,786.3

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