What is the expected commission based on making calls

Reference no: EM131439224

Question: A stockbroker calls on potential clients from referrals. For each call, there is a 10% chance that the client will decide to invest with the firm. Fifty-five percent of those interested are found not to be qualified, based on the brokerage firm's screening criteria. The remaining are qualified. Of these, half will invest an average of $5,000, 25% will invest an average of $20,000, 15% will invest an average of $50,000, and the remainder will invest $100,000. The commission schedule is as follows:

Transaction Amount Commission

Up to $25,000 $50 + 0.5% of the amount

$25,001 to $50,000 $75 + 0.4% of the amount

$50,001 to $100,000 $125 + 0.3% of the amount

The broker keeps half the commission. Develop a spreadsheet to calculate the broker's commission based on the number of calls per month made. What is the expected commission based on making 600 calls?

Reference no: EM131439224

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