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Compute the expected return on lauren computer stock

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A stockbroker calls you and suggests that you invest in the Lauren Computer Company. After analyzing the firm' s annual report and other material, you believe that the distribution of expected rates of return is as follows:

LAUREN COMPUTER CO.

Possible Rate of Return    Probability

- 0.60                                     0.05

- 0.30                                     0.20

- 0.10                                     0.10

   0.20                                     0.30

   0.40                                     0.20

   0.80                                     0.15

Compute the expected return [E (Ri )] on Lauren Computer stock.

Reference no: EM131997470

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