Answer:
The stocks expected decrease is of $1.25.
Step-by-step explanation:
To find the expected change, we multiply each change by it's probability.
We have that:
There is a 25% probability of increasing by $10.
There is a 75% probability of decreasing by $5(that is, 75% probability of the value being -5).
What is the stocks expected increase or decrease?
0.25*10 - 0.75*5 = -1.25
Negative, so a decrease.
The stocks expected decrease is of $1.25.
