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Probability Security Returns if State of of State of State Occurs Economy Bust Boom Economy 0.60 0.40 Roll 9% 20% Ross 13% 5% Calculate

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Probability Security Returns if State of of State of State Occurs Economy Bust Boom Economy 0.60 0.40 Roll 9% 20% Ross 13% 5% Calculate the expected return on a portfolio of 40 percent Roll and 60 percent Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. State of Economy Probability of State of Economy Portfolio Return if State Occurs Product Bust 0.60 Boom 0.40 do do % E(Rp)= % % % %

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