Use the information for the question(s)below.
Consider an economy with two types of firms,S and I.S firms always move together,but I firms move independently of each other.For both types of firm there is a 70% probability that the firm will have a 20% return and a 30% probability that the firm will have a -30% return.
-What is the expected return for an individual firm?
A)14%
B)3%
C)5%
D)-5%

Question

Quizplus · Accepted Answer

The Answer of Use the information for the question(s)below.
Consider an economy with two types of firms,S and I.S firms always move together,but I firms move independently of each other.For both types of firm there is a 70% probability that the firm will have a 20% return and a 30% probability that the firm will have a -30% return.
-What is the expected return for an individual firm?
A)14%
B)3%
C)5%
D)-5%

Use the Information for the Question(s)below