# Probability of Expected Return on a Stock Purchase

An investor estimates that there is a 1 in 10 chance that a stock purchase will lose 20% of its value, a 2 in 10 chance it will break even, a 4 in 10 chance it will gain 15% and 3 in 10 chance it will gain 30%. What is the expected return.

Please show work.

© BrainMass Inc. brainmass.com June 4, 2020, 3:35 am ad1c9bdddfhttps://brainmass.com/statistics/probability/probability-expected-return-stock-purchase-522666

#### Solution Preview

An investor estimates that there is a 1 in 10 chance that a stock purchase will lose 20% of its value, a 2 in 10 chance it will break even, a 4 in 10 chance it will gain 15% and ...

#### Solution Summary

The probability of expected returns on a stock purchase are determined.

$2.19