Explore BrainMass

Explore BrainMass

    Expected rate of return

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Kelly B. Stites, Inc., is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on risk (as measured by the standard deviation) and return?

    Security A Security B

    Probability Return Probability Return

    .20 -2% .10 5%
    .50 19% .30 7%
    .30 25% .40 12%
    .20 14%

    © BrainMass Inc. brainmass.com June 3, 2020, 5:05 pm ad1c9bdddf
    https://brainmass.com/business/modified-internal-rate-of-return/expected-rate-return-common-stocks-13716

    Solution Summary

    Expected rate of return is shown.

    $2.19

    ADVERTISEMENT