Question
Using the table of probabilities and returns for a stock mutual fund, what is the mutual fund's expected return? State Probability Return Depression 0.05 -20%
Using the table of probabilities and returns for a stock mutual fund, what is the mutual fund's expected return?
| State | Probability | Return |
| Depression | 0.05 | -20% |
| Recession | 0.25 | -5% |
| Normal | 0.5 | 8% |
| Boom | 0.2 | 30% |
Multiple Choice
-
9.15%
-
10.25%
-
7.75%
-
8.00%
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Essential Mathematics For Economic Analysis
Authors: Knut Sydsaeter, Peter Hammond, Arne Strom
4th Edition
0273760688, 9780273760689
