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Security Returns if State Occurs State of Economy Probability of State of Economy Bust Boom .40 60 Roll -15% 22 Ross 15% Calculate the

  

Security Returns if State Occurs State of Economy Probability of State of Economy Bust Boom .40 60 Roll -15% 22 Ross 15% 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 Return if State Occurs Product Return if State Occurs Product Economy Bust .40 -15.00% % 15 % % Boom .60 22 % % 5% % E(R)= 7.20 % E(R) = 9.00 %

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