T Martell Inc stock has a 5096 ctmce of producmg a 30% retum, a 25, chance of a 9% mill, and a 25% ctmce of oducmg a -25% returm What Is Martell's am 10

Answer

a .

Explanation

Computation of Expected Return:

Expected Return = p1 * Er1 + p2 * Er2 + p3 * Er3

Here,

p1 = 50% = 0.5, p2 = 25% = 0.25, p3 = 25% = 0.25

Er1 = 30%, Er2 = 9%, Er3 = -25%

So, 

Expected return = (0.5 * 30%) + (0.25 * 9%) + (0.25 * (-25%))

Expected return = 15% + 2.25% + (- 6.25%)

Expected return = 15% + 2.25% + (- 6.25%)

Expected return = 15% + 2.25% - 6.25%

Expected return = 11%

So, Expected Return is 11% which is not given in the options. So, just to submit answer i have ticked on Option A.