Analysts predict that over the next year, Thete, Inc.’s common stock has a 30% chance of...
Analysts predict that over the next year, Thete, Inc.’s common stock has a 30% chance of returning 25%, a 40% chance of returning 16%, and a 30% chance of returning 6%. What is the expected rate of return on Thete, Inc.’s common stock? Submit your answer as a percentage and round to two decimal places.
Homework Answers
Expected return = Sum of (Probability * return)
= (30% * 25%) + (40% * 16%) + (30% * 6%)
= 7.5% + 6.4% + 1.8%
= 15.70%
Expected return = 15.70%
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Analysts predict that over the next year, Thete, Inc.’s common
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Hello, Please Solve the following problems with details: 1. Analysts predict that over the next year, Thete, Inc.’s common stock has a 30% chance of returning 25%, a 40% chance of returning 16%, and a 30% chance of returning 6%. What is the expected rate of return on Thete, Inc.’s common stock? Submit your answer as a percentage and round to two decimal places. Thank you,
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