Refer to the table below. A particular stock market investment strategy has the following possible outcomes: $$\begin{array} { | c | c | c | c | }
\hline & \begin{array} { c }
\text { Good } \
\text { Market }
\end{array} & \begin{array} { c }
\text { Bad } \
\text { Market }
\end{array} & \begin{array} { c }
\text { Disastrous } \
\text { Market }
\end{array} \
\hline \text { Probability } & 0.4 & 0.4 & 0.2 \
\hline \begin{array} { c }
\text { Rate of } \
\text { Return }
\end{array} & 0.2 & 0.05 & - 0.15 \
\hline
\end{array}$$ (A) What is the expected return fram this stack market investment strategy?
(B) Wauld you choose this expected return ar take a sefe return of either \& percent fram a U.S. Tremsury bill ar 6 percent from a saving deposit at a bark? Why?
(C) Suppase you Trandather tells you he wauld chaose a safe return of 7 percent fram a bank over the above stock-market investment stratedy. Is he risk-averse? Esgalain.

Question

Refer to the table below. A particular stock market investment strategy has the following possible outcomes: $$\begin{array} { | c | c | c | c | } 
\hline & \begin{array} { c } 
\text { Good } \
\text { Market }
\end{array} & \begin{array} { c } 
\text { Bad } \
\text { Market }
\end{array} & \begin{array} { c } 
\text { Disastrous } \
\text { Market }
\end{array} \
\hline \text { Probability } & 0.4 & 0.4 & 0.2 \
\hline \begin{array} { c } 
\text { Rate of } \
\text { Return }
\end{array} & 0.2 & 0.05 & - 0.15 \
\hline
\end{array}$$ (A) What is the expected return fram this stack market investment strategy?
(B) Wauld you choose this expected return ar take a sefe return of either \& percent fram a U.S. Tremsury bill ar 6 percent from a saving deposit at a bark? Why?
(C) Suppase you Trandather tells you he wauld chaose a safe return of 7 percent fram a bank over the above stock-market investment stratedy. Is he risk-averse? Esgalain.

Quizplus · Accepted Answer

The Answer of Refer to the table below. A particular stock market investment strategy has the following possible outcomes: $$\begin{array} { | c | c | c | c | } 
\hline & \begin{array} { c } 
\text { Good } \
\text { Market }
\end{array} & \begin{array} { c } 
\text { Bad } \
\text { Market }
\end{array} & \begin{array} { c } 
\text { Disastrous } \
\text { Market }
\end{array} \
\hline \text { Probability } & 0.4 & 0.4 & 0.2 \
\hline \begin{array} { c } 
\text { Rate of } \
\text { Return }
\end{array} & 0.2 & 0.05 & - 0.15 \
\hline
\end{array}$$ (A) What is the expected return fram this stack market investment strategy?
(B) Wauld you choose this expected return ar take a sefe return of either \& percent fram a U.S. Tremsury bill ar 6 percent from a saving deposit at a bark? Why?
(C) Suppase you Trandather tells you he wauld chaose a safe return of 7 percent fram a bank over the above stock-market investment stratedy. Is he risk-averse? Esgalain.

Refer to the Table Below (A) What Is the Expected Return Fram This Stack Market