Question
Problem 11-6 Security Returns If State Occurs State of Probability of Economy State of Economy Roll Ross Bust .30 -12 % 16 % Boom .70
Problem 11-6
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| Security Returns If State Occurs | |||
State of | Probability of | ||||
Economy | State of Economy | Roll | Ross | ||
Bust | .30 | -12 | % | 16 | % |
Boom | .70 | 23 |
| 6 |
|
Calculate the expected return on a portfolio of 55 percent Roll and 45 percent Ross by filling in the following table: (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
State of Economy | Probability of State of Economy | Portfolio Return If State Occurs | Product |
| |
Bust | .30 |
| % |
| % |
Boom | .70 |
| % |
| % |
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| E(RP) = |
| % |
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