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Question

mework aspx?homeworkld-448805231&questionld-1;&flushed-false;&cld-47067798centerwin-yes; Managerial Finance_Fall 2017 Section 1 (9:00-9.50 AM) Student/PlayerHo Homework: Homework 7_Chapter 8 Save Fina score: 0 of 2 pts 101 5 (0 complete) HW Score: 0%, 0 of 10 pts My cWarm-Up 8-2 (similar to) Question Help * Four analysts cover te stock of Ruonne Chemical·One forecasts ae% return tr the expects a2% uminte ng year You are relatively confident that te return 49%, respectively, to the analysts' forecasts. pr Cours coming year. Asecond expects te etum to be-49. Atird predict, a ream of 10% Aturth wil be positive but rot large, so you arbitrary assign probabllies of being corect of 2%, 9%, 16%, and Given these probabilities, what is Fluorine Chemical's expected return for the coming year? Fuorine Cernas expected return for the coming year is%. (Round to two decinal places.) Assig Study Resul Pears Docun Modul Enter your answer in the answor box and then click Chack Answer All parts showing 0 Type here to search

Explanation / Answer

The following is the calcualton of Flourine chemical expected return:

Analyst expectation Probability expectation * probability 1 6% 26% =>0.26 (6*0.26)=>1.56 2 -4% 9% =>0.09 (4*0.09)=>-0.36 3 10% 16%=>0.16 (10*0.16)=>1.6 4 2% 49%=>0.49 (2*0.49)=>0.98 expected return 3.78%

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