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Given the Following Probability Distribution, Calculate the Expected Return of Security

Question 5

Multiple Choice

Given the following probability distribution, calculate the expected return of security XYZ. Security XYZ’sPotential return20%30%40%50%10%Probability0.30.20.10.10.3\begin{array}{c}\begin{array}{lll} \text {Security XYZ's}\\\underline{\text {Potential return}}\\ 20 \% \\ 30 \% \\ -40 \% \\50 \% \\10 \% \end{array}\begin{array}{lll}\\\underline{\text {Probability}}\\0.3 \\0.2 \\0.1 \\0.1 \\0.3 \end{array}\end{array}


A) 16 percent
B) 22 percent
C) 25 percent
D) 18 percent

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