Exhibit 7.13
Use the Information Below for the Following Problem(S)
A financial analyst covering Magnum Oil has determined the following four possible returns given four different states of the economy over the next period.
$$\begin{array} { c c }
\text { Prabability } & \text { Return } \
\hline0 .10& - .20 \
0 .25 & - .05 \
0 .4 [ & 0 .15 \
0.25 & 0.30
\end{array}$$
-Refer to Exhibit 7.13.Calculate the expected return for Magnum Oil.
A) 5.0
B) 10.3%
C) 13.7%
D) 17.5%
E) 20.0%

Question

Exhibit 7.13
Use the Information Below for the Following Problem(S)
A financial analyst covering Magnum Oil has determined the following four possible returns given four different states of the economy over the next period.
 $$\begin{array} { c c } 
\text { Prabability } & \text { Return } \
\hline0 .10& - .20 \
0 .25 & - .05 \
0 .4 [ & 0 .15 \
0.25 & 0.30
\end{array}$$
-Refer to Exhibit 7.13.Calculate the expected return for Magnum Oil.
A) 5.0
B) 10.3%
C) 13.7%
D) 17.5%
E) 20.0%

Quizplus · Accepted Answer

Eagdected Return far Magnum Oil
$$\begin{array} { l } 
= 0 .1 ( - 0 .20 ) + 0 .25 ( - 0 . 05 ) + 0 .40 ( 0.15 ) + ( 0.25 ) ( 0.30 ) \
= - 0.02 - 0.0125 + 0 .06 + 0 .075 = 0.1025
\end{array}$$

Exhibit 713 Use the Information Below for the Following Problem(S) a

Exhibit 713
Use the Information Below for the Following Problem(S)
a