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Security Returns if State Occurs State of Economy Probability of State of Economy Roll Ross Bust .30 8 % 19 % Boom .70 29 7
Security Returns if State Occurs | |||||||||||
State of Economy | Probability of State of Economy | Roll | Ross | ||||||||
Bust | .30 | 8 | % | 19 | % | ||||||
Boom | .70 | 29 | 7 | ||||||||
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.)
State of Economy Bust Boom Probability of State of Economy .30 .70 Roll Return if State Occurs -8.00 % 29 % E(R) = Product % % 17.90 % Return if State Occurs Ross 19 % 7% E(R) = Product % % 10.60 %
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