1)

Suppose the Japanese stock market bubble peaked at 48,200 in 1989. Two and a half years later it had fallen to 19,800.

What was the percentage decline? (Negative answer should be indicated with a minus sign. Round your answer to 2 decimal places.)

Market decline

%

2)

Compute the expected return given these three economic states, their likelihoods, and the potential returns:(Round your answer to 2 decimal places.)

Economic State		Probability		Return
Fast growth		0.31		32	%
Slow growth		0.43		20
Recession		0.26