Suppose you make a 2-year investment of $100,000 and it grows by 100% to $200,000 during the first year. During the second year, however, the investment suffers a 50% loss, from $200,000 back to $100,000. Calculate the geometric mean return rate. 0% 15% 25% 18%
QUESTION 4
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Suppose you make a 2-year investment of $100,000 and it grows by 100% to $200,000 during the first year.
During the second year, however, the investment suffers a 50% loss, from $200,000 back to $100,000.
Calculate the geometric mean return rate.
0%
15%
25%
18%
QUESTION 5
A mutual fund salesperson has arranged to call on three people tomorrow. Based on past experience, the salesperson knows there is a 20% chance of closing a sale on each call. Below is the probability distribution of the number of sales. Determine the Expected number of sales the salesperson will make.
| Random Variable X = # sales | P(X) |
| 3 | 0.08 |
| 2 | 0.096 |
| 1 | 0.384 |
| 0 | 0.512 |
|
a) 0.816 |
||
|
b) 0.716 |
||
|
c) 0.616 |
||
|
d) 0.516 |
QUESTION 6
A random variable is a function or rule that assigns a number to each outcome of an experiment.
True
False
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