A stockbroker calls you and suggests that you invest in the Lauren Computer Company. After analyzing the firm' s annual report and other material, you believe that the distribution of expected rates of return is as follows:
LAUREN COMPUTER CO.
Possible Rate of Return Probability
- 0.60 0.05
- 0.30 0.20
- 0.10 0.10
0.20 0.30
0.40 0.20
0.80 0.15
Compute the expected return [E (Ri )] on Lauren Computer stock.