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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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