Probability of Expected Return on a Stock Purchase
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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.
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Solution Summary
The probability of expected returns on a stock purchase are determined.
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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 ...
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