Question
Security Returns if State Occurs State of Economy Probability of State of Economy Roll Ross Bust .30 18 % 18 % Boom .70 17 5
| Security Returns if State Occurs | |||||||||||
| State of Economy | Probability of State of Economy | Roll | Ross | ||||||||
| Bust | .30 | 18 | % | 18 | % | ||||||
| Boom | .70 | 17 | 5 | ||||||||
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:
| state of economy | prob. of state of economy | return if states occurs | product | |
| bust | .30 | -18.00% | _____% | |
| boom | .70 | 17% | ______% | |
| E(R)= | 6.50% |
ROSS
| State of economy | prob. of state of economy | return if state occurs | product |
| bust | .30 | 18% | ____% |
| boom | .70 | 5% | ____% |
| E(R)= | 8.9% |
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Intermediate Accounting Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
12th Canadian edition
119-49633-5, 1119496497, 1119496330, 978-1119496496
