UNIT 8 $6,860 ($9,800 X .70) COST OF NEXT 7 UNITS = (8 X $6,860...

36. Correct answer b.

Expected return = .1 (-.20) + .2 (.05) + .4 (.15) + .2 (.20) + .1 (.30)

= -.02 + .01 + .06 + .04 + .03

= .12 or 12%

100