Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Based on the following information, calculate the expected return of an investment: - Probability of a 10% return: 0.4 - Probability of a 5% return: 0.3 - Probability of a -2% return: 0.3 What is the expected return?

5.0\%

3.0\%

2.7\%

4.1\%

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Verified step by step guidance

Step 1: Understand the concept of expected return. The expected return is calculated as the weighted average of all possible returns, where the weights are the probabilities of each return occurring.

Step 2: Write the formula for expected return: E(R) = Σ [P(i) × R(i)], where P(i) is the probability of return i, and R(i) is the return associated with that probability.

Step 3: Substitute the given values into the formula. You have three probabilities and their corresponding returns: P(1) = 0.4, R(1) = 10%; P(2) = 0.3, R(2) = 5%; P(3) = 0.3, R(3) = -2%.

Step 4: Perform the multiplication for each term in the summation: (0.4 × 10%), (0.3 × 5%), and (0.3 × -2%).

Step 5: Add the results of the multiplications together to find the expected return. This will give you the weighted average return based on the probabilities provided.