This answer results from using a positive return for the first return instead of a negative return.
The expected rate of return is the sum of each of the possible returns multiplied by its probability of occurring, or the weighted average of the possible returns. (.10 × [.20]) + (.20 × .05) + (.40 × .15) + (.20 × .20) + (.10 × .30) = .12
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This is an unweighted average of the possible returns. The expected rate of return is a weighted average, using the probabilities as the weights.
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The expected rate of return on Stock X would be
