Question

calculate the expected return with the help of following data; p= .3 r=30% p=.4 r=16% p=.3 r=8%​

Answer 1

Expected return is 39.4%

Explanation:

Rate of return is calculated by multiplying potential outcomes with probability of occurrence. And at last all the addends are added at lasts.

In this problem

$\begin{array}{l}{P_{1} =.30, P_{2} =.40, P_{3} =.30} \\ {R_{1} =30 \% R_{2} =16 \% R_{3} =8 \%}\end{array}$    

To find solution: $\left(P_{1} \times R_{1}\right)+\left(P_{2} \times R_{2}\right)+\left(P_{3} \times R_{3}\right)$

Expected return = $(0.30 \times 0.30)+(0.40 \times 0.16)+(0.30 \times 0.80)$

             = 0.09 + 0.064 + 0.24

             = 0.394

Expected return = 39.4%

Answer 2

Answer:

Explanation:

"The rate of return is calculated by taking out the product of multiplying potential outcomes and probability of occurrence. And at last all the addends are added at lasts.

In this problem

To find solution:

Expected return =  0.09 + 0.064 + 0.24  = 0.394

Expected return = 39.4%

So, the expected return is 39.4%

"