Required:
Assume that you expect to hold a $40,000 investment for one year. It is forecasted to have a year end value of $42,000 with a 30% probability; a year end value of $48,000 with a 45% probability; and a year end value of $60,000 with a 25% probability.
Required:
Question 1: What is the expected holding period return for this investment?
Note: Please describe comprehensively and provide step by step solution.