You are considering buying stock A. If the economy grows rapidly, you may earn 35 percent on the investment, while a declining economy could result in a 10 percent loss. Slow economic growth may generate a return of 3 percent. If the probability is 14 percent for rapid growth, 17 percent for a declining economy, and 69 percent for slow growth, what is the expected return on this investment

A x 0.03 =  R

Explanation:

Replace the variable A i use for the cost of the stock

R = Return

A x 0.03 =  R

Due to slow growth being expected (69% probability), then you use the 3% for slow, and therefore do the price of Stock A x 0.03 to find out the gain from the start.

a) 12

Explanation:

If the revenue exceeds the expenses by $2,000 per month this means that they are in profit $2,000 every month. Now the expenses increased by $3,500 so we need to subtract the $2,000 from this to calculate by how much expenses are exceeding profit.

$3,500 - $2,000 = $1,500

Now we can see that they need to pay $1,500 in expenses every month. Since they have $18,000 in cash we can divide this by 1,500 to calculate how many months they will be able to pay the expenses before they run out of cash.

18,000 / 1,500 = 12 months