Answer: $8.50
Step-by-step explanation:
The expected gain (loss) is a weighted average of the probability of the different gains (losses) and the gains or losses.
Expected gain or loss for stock JKL:
= (Probability of losing $25 * -25) + ( Probability of gaining $5 * 5) + ( Probability of gaining $45 * 45)
= (15% * -25) + (65% * 5) + (20% * 45)
= -3.75 + 3.25 + 9
= $8.50
