Checking my answers. If a stock analyst believes there is a 10%probability that the stock price of Dymonatiswill be $30 at the end of the year, a 50%probability that it will be $40, and a 40%probability that it will be $50, then theexpected value of the stock at the end of theyear is:a. $38.b. $43.c. $32.d. $40. Two individualsmarket. Bonniemake up the auto insurancedrives well, and theprobability of her having an accident is 10%this year. Lisa also drives carefully, and herprobability of having an accident is 5%.What is the probability that Bonnie and Lisawill both have accidents this year?O a. 0.005%b. 0.75%c. 0.5%d. 0.15%

The expected value of an event or action is the anticipated reward after accounting for the rewards…

If a stock analyst believes there is a 10% probability that the stock price of Dymonatis will be $30 at the end of the year, a 50% probability that it will be $40, and a 40% probability that it will be $50, then the expected value of the stock at the end of the year is: O a. $38. b. $43. c. $32. d. $40.

If a stock analyst believes there is a 10% probability that the stock price of Dymonatis will be $30 at the end of the year, a 50% probability that it will be $40, and a 40% probability that it will be $50, then the expected value of the stock at the end of the year is: O a. $38. b. $43. c. $32. d. $40.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter9: The Financial Markets And The Economy: The Tail That Wags The Dog

Section: Chapter Questions

Problem 6TY

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