1A2I STOCK X HAS THE FOLLOWING PROBABILITY DISTRIBUTION OF EXPECTED F...

36. CSO: 1A2e LOS: 1A2i

Stock X has the following probability distribution of expected future returns.

Expected

Probability Return

.10 -20%

.20 5%

.40 15%

.20 20%

.10 30%

The expected rate of return on stock X would be

a. 10%.

b. 12%.

c. 16%.

d. 19%.