pm.3 You start trading with an account worth $500,000. You decide that themost you want to risk on any trade is 0.50% of the account value.You've been following a stock and believe the appropriate entry point is$40 per share with an 8% trailing stop. Your track record indicates thatyou have a probability of winning on 40% of your trades with anaverage win of 15%. When you lose your average loss is 8%. Based onthis information, what is your expectancy on each trade.○ $375$188○ $300○ $600

The expected return is the average predicted profit or loss on an investment. It takes into account…

Answered: this information, what is your…

Business

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this information, what is your expectancy on each trade. O $375 $188 O $300 O $600

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

pm.3

You start trading with an account worth $500,000. You decide that the
most you want to risk on any trade is 0.50% of the account value.
You've been following a stock and believe the appropriate entry point is
$40 per share with an 8% trailing stop. Your track record indicates that
you have a probability of winning on 40% of your trades with an
average win of 15%. When you lose your average loss is 8%. Based on
this information, what is your expectancy on each trade.
○ $375
$188
○ $300
○ $600

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