Stock A has the following returns for various states of the economy Stock A\'s e

Question

Stock A has the following returns for various states of the economy Stock A's expected return is 5.4% 7.2%. 8.2%. 9.6% You are considering a sales job thjit pays you on a commission basis or a salaried position that pays you $50,000 per year Historical data suggests the following probability distribution for your commission income. Which job has the higher expected income The salary of $50,000 is greater than the exported commission of $49,630. The salary of $50,000 is greater than the expected commission of $48,400. The salary of $50,000 is less than the expected commission of $50,050. The salary of $50,000 is less than the expected commission of $52,720. The minimum rate of return necessary to attract an investor to purchase or hold a security is referred to as the stock s beta investor's risk premium. investor's required rate of retum. risk-free rate. Of the following different types of securities, which is typically considered most risky long-term corporate bonds long-term government bonds common stocks of large companies common stocks of small companies

Explanation / Answer

As per question sheet:

Solution 13: C) 8.20 %

Solution 14: D) the salary of $50,000 is less than expected commission of $52720.

Solution 15: C) Investors required rate of return

Solution 16: D) common stocks of small companies

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