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Problem 11-4 Expected Returns (LO1, CFA1) State of Economy Bust Boom Security Returns if State Occurs Probability of State of Economy Roll Ross .30 -16%
Problem 11-4 Expected Returns (LO1, CFA1) State of Economy Bust Boom Security Returns if State Occurs Probability of State of Economy Roll Ross .30 -16% 16% .70 15 6 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.) Roll Ross State of Economy Return if State Occurs Product Return if State Occurs Product Probability of State of Economy 30 .70 Bust Boom -16.00 % 15 % E(R) = % % 5.70% 16% 6% E(R) = % % 9.00%
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