4. Determine the probability that the following tree reflecting a stock ivestement has a rate of return higher than 7% per year. There is a 40% chance they will keep the stock 3 years and 60% they will keep it 5 years. PeoB sou FOR: A FOR 430 432 $40 20/ 425 $41

4. Determine the probability that the following tree reflecting a stock ivestement has a rate of return higher than 7% per year. There is a 40% chance they will keep the stock 3 years and 60% they will keep it 5 years. PeoB sou FOR: A FOR 430 432 $40 20/ 425 $41

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

4. Determine the probability that the following tree reflecting a stock ivestement has a rate of return higher
than 7% per year. There is a 40% chance they will keep the stock 3 years and 60% they will keep it 5
years.
PeoB
SEu FUR : A
HOLD
FOR
30%
4 30
()
432
20%
$40
4 25
Poe 425
Se
手41
$ 50

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