Problem 11-4 Expected Returns (LO1, CFA1) State of Economy Bust Boom State of Economy Probability of State of Economy Bust Boom .60 .40 Probability of State of Economy .60 40 Security Returns if State Occurs Calculate the expected returns for Roll and Ross by filling in the following table: (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Calculate the product using the decimal value of the probability and the percentage value of the return. Input all your answers as a percent rounded to 2 decimal places.) Return if State Occurs Roll -11% 26 Roll -11.00% 26 % E(R) = Ross Product 19% 6 % % 3.80 % Return if State Occurs Ross 19 % 6 % E(R) = Product % % 13.80 %

Problem 11-4 Expected Returns (LO1, CFA1) Calculate the expected returns for Roll and Ross by filling in the following table: (A negative volue should be indicated by a minus sign. Do not round intermediate calculations. Calculote the product using the decimal volue of the probability and the percentage volue of the return. Input all your answers as a percent rounded to 2 decimal places.)