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Calculate the expected Gain of Loss of stock ABC.
Please help if you can!

Calculate the expected Gain of Loss of stock ABC. Please help if you can!-example-1
User NRA
by
7.4k points

2 Answers

7 votes

Answer:

$11 gain

Step-by-step explanation:

User Adrian Mojica
by
8.6k points
11 votes

Answer: $11 gain

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Step-by-step explanation:

Focus on the first row only. We won't worry about the other stocks.

Convert each of the percentages to decimal form

  • 40% = 0.40
  • 15% = 0.15
  • 45% = 0.45

Then multiply those decimal values with their respective gains or losses.

Use a negative sign to indicate losses.

  • 0.40*(-25) = -10
  • 0.15*5 = 0.75
  • 0.45*45 = 20.25

The last step is to add up each of the results to get the expected value.

-10+0.75+20.25 = 11

The result is positive, so it's a gain rather than a loss.

On average, we expect an $11 gain for stock ABC.

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Side note: Thank you for making the screenshot much more clear.

User SamLosAngeles
by
8.5k points

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