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Security Returns if State Occurs State of Economy Probability of State of Economy Roll Ross Bust 0.30 8 % 19 % Boom 0.70 29 7
Security Returns if State Occurs | |||||||||||
State of Economy | Probability of State of Economy | Roll | Ross | ||||||||
Bust | 0.30 | 8 | % | 19 | % | ||||||
Boom | 0.70 | 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.)
Roll | Ross | |||||||||
State of Economy | Probability of State of Economy | Return if State Occurs | Product | Return if State Occurs | Product | |||||
Bust | 0.30 | (8) | % | % | 19 | % | % | |||
Boom | 0.70 | 29 | % | % | 7 | % | % | |||
E(R)= | 17.90 | % | E(R)=s | 10.60 | % |
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