What is the expected return from an asset having the following possible returns and associated probabilities?
$\begin{array}{cc}
\text {Possible return} & \text {Probability} \
25 \% & 20 \% \
15 \% & 50 \% \
5 \% & 30 \%
\end{array}$
A) 13.5%.
B) 14%.
C) 15%.
D) 16.5%.

Question

What is the expected return from an asset having the following possible returns and associated probabilities?
$\begin{array}{cc} 
\text {Possible return} & \text {Probability} \
 25 \%  & 20 \%  \
 15 \% &  50 \% \
 5 \%  & 30 \% 
\end{array}$
A) 13.5%.
B) 14%.
C) 15%.
D) 16.5%.

Quizplus · Accepted Answer

The calculation is: 25% *0.2 + 15% * 0.5 + 5% * 0.3 = 14%.

What Is the Expected Return from an Asset Having the Following