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Security Returns If State Occurs State of Probability of Economy State of Economy Roll Ross Bust .50 -14 % 14 % Boom .50 31 7

Security Returns If State Occurs State of Probability of Economy State of Economy Roll Ross Bust .50 -14 % 14 % Boom .50 31 7 Calculate the expected returns for Roll and Ross by filling in the following table (verify your answer by expressing returns as percentages as well as decimals): (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your E(R) answers to 2 decimal places and your Product answers to 4 decimal places. Omit the "%" sign in your response.) Roll Ross State of Economy Probability of State of Economy Return If State Occurs Product Return if State Occurs Product Bust .50 % % Boom .50 % % E(R) = % E(R) = %

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