Question: Sabina Resources has a claim in the Hackett River of the Northwest Territories that is estimated to contain some 47 million tons of ore rich in? silver, zinc,? copper, lead, and gold. Hackett River Explorations has staked a claim beside? Sabina's and will issue stock to raise funds for test drilling. The table below outlines the various possible outcomes of the test drilling and the associated returns on the stock if you buy some. What is the expected return on the stock if you buy some of the new? issue?
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States of Nature
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Probabilities
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Returns
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Nothing of value in claim
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0.45
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negative 225%
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A small area of ore
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0.25
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negative 45%
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A large amount of zinc
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0.20
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80%
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A large amount of silver
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0.10
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150%
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