Question
You loan a friend $5,000. There is a 15% chance your friend will pay you a 3% return, a 40% chance he will pay you
You loan a friend $5,000. There is a 15% chance your friend will pay you a 3% return, a 40% chance he will pay you a 2% return and a 45% chance he will pay you only a 1% return.
What is your expected return after one year?
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Principles of Economics
Authors: Gregory Mankiw
7th edition
128516587X, 978-1285165875
