Asked by Justin Mccoy on Sep 24, 2024

verifed

Verified

​Smart Sam can make a $200 investment that yields $1000 50% of the time and $0 50% of the time.What is his expected return on the investment?

A) ​$200
B) $300
C) $400
D) ​$500

Expected Return

The projected profit or loss from an investment over a given period.

Investment

The action of allocating resources, usually money, with the expectation of generating an income or profit.

Yields

The income return on an investment, such as the interest or dividends received from holding a particular security.

  • Understand the financial consequences associated with high-risk investments and the significance of interest rates.
verifed

Verified Answer

CB
carol bellz5 days ago
Final Answer :
B
Explanation :
The expected return is calculated as (0.5 * $1000) + (0.5 * $0) - $200 = $500 - $200 = $300.