Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following is the daily return schedule for operating various businesses under bad, normal, and good weather. Return on Investment Type of Business Good Weather

The following is the daily return schedule for operating various businesses under bad, normal, and good weather.
Return on Investment
Type of Business
Good Weather
(Probability =0.25)
Normal Weather
(Probability =0.5)
Bad Weather
(Probability =0.25)
16%
12%
-12%
Ice Cream Shop
-8%
10%
20%
Coffee Shop
12%
6%
-8%
Bikini Shop
12%
8%
-4%
Cold Drinks Shop
Akaldeep has a portfolio consisting of 11% in an Ice Cream Shop, 26% in a Coffee Shop, 11% in a Bikini Shop, and the rest in a Cold Drinks Shop. Determine the overall expected return rate on his investments.
a.
1.43%
b.
3.48%
c.
6.96%
d.
6.41%
e.
6.41%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Elementary Statistics

Authors: Mario F. Triola

12th Edition

0321836960, 978-0321836960

Students also viewed these Finance questions