Given the following probability distribution for the possible returns of an asset, what is the expected return?
\[
\begin{array}{|c|c|}
\hline
\text{Return (25)} & \text{Probability} \\
\hline
10 & 0.2 \\
8 & 0.5 \\
4 & 0.3 \\
\hline
\end{array}
\]
A) 7.2\%
B) 8.0\%
C) 6.5\%
D) 9.0\%
A
C) 6.5\%
B
D) 9.0\%
C
A) 7.2\%
D
B) 8.0\%
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검증된 단계별 안내
1
Step 1: Understand the concept of expected return. The expected return is calculated as the weighted average of all possible returns, where the weights are the probabilities of each return occurring.
Step 2: Write down the formula for expected return: \( E(R) = \sum (R_i \times P_i) \), where \( R_i \) is the return for each outcome and \( P_i \) is the probability of that outcome.