Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. risk and probability micro-pub, inc., is consideri

Risk and probability Micro-Pub, Inc., is considering the purchase of one of two digital cameras,...

80.2K

Verified Solution

Question

Finance

image
Risk and probability Micro-Pub, Inc., is considering the purchase of one of two digital cameras, R and S, each of which requires an initial investment of $5,000.
Management has constructed the following table of estimates of rates of return and probabilities for pessimistic, most likely, and optimistic results:
a. Determine the range for the rate of return for each of the two cameras
b. Determine the value of the expected return for each camera.
c. Which camera purchase is riskier? Why?
1. The range for the rate of return for camera R is..........%. (Round to the nearest whole number.)
Camera R Amount Probability $5,000 1.00 Camera S Amount Probability $5,000 1.00 Initial investment Annual rate of return Pessimistic Most likely Optimistic 24% 29% 34% 0.29 0.48 0.23 16% 25% 35% 0.17 0.52 0.31

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students