document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=212719>Question 212719</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Compute the expected rate of return of Asset A that has a rate of return 8%, 13%, and 18% and a probability of 30%, 60%, and 10% respectively. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #160658 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=160658\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Compute the expected rate of return of Asset A that has a rate of return 8%, 13%, and 18% and a probability of 30%, 60%, and 10% respectively.<BR>\n" );
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document.write( "Random variable values are 0.08, 0.13, 0.18<BR>\n" );
document.write( "Corresponding probabilities are 0.30, 0.60, 0.10<BR>\n" );
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document.write( "Multiply the three pairings and add to get the expected rate.<BR>\n" );
document.write( "E(x) = 0.3*0.08 + 0.6*0.13 + 0.1*0.18 = 0.12 = 12%<BR>\n" );
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document.write( "Cheers,<BR>\n" );
document.write( "Stan H. </SPAN>\n" );
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