Sugar and Spice stock is expected to produce the following returns given the various states of the economy.What is the expected return on this stock?
A)7.89 percent
B)8.56 percent
C)9.43 percent
D)10.05 percent
E)10.50 percent

Question

Sugar and Spice stock is expected to produce the following returns given the various states of the economy.What is the expected return on this stock? 
A)7.89 percent 
B)8.56 percent 
C)9.43 percent 
D)10.05 percent 
E)10.50 percent

Quizplus · Accepted Answer

Expected return = (0.05 × 0.05) + (0.70 × 0.09) + (0.25 × 0.14) = 10.05 percent

Sugar and Spice Stock Is Expected to Produce the Following