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Business, 24.03.2020 02:23 lexybellx3

Consider an asset that costs $130 today. You are going to hold it for 1 year and then sell it. Suppose that there is a 25 percent chance that it will be worth $110 in a year, a 25 percent chance that it will be worth $120 in a year, and a 50 percent chance that it will be worth $160 in a year. What is its average expected rate of return?
At what price would the asset have a zero rate of return?

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