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Security Returns If State Occurs State of Probability of Economy State of Economy Roll Ross Bust .40 -17 % 18 % Boom .60 28 7
Security Returns If State Occurs | |||||||||||
State of | Probability of | ||||||||||
Economy | State of Economy | Roll | Ross | ||||||||
Bust | .40 | -17 | % | 18 | % | ||||||
Boom | .60 | 28 | 7 | ||||||||
Calculate the expected return on a portfolio of 55 percent Roll and 45 percent Ross by filling in the following table: (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
State of Economy | Probability of State of Economy | Portfolio Return If State Occurs | Product | ||
Bust | .40 | % | % | ||
Boom | .60 | % | % | ||
E(RP) = | % | ||||
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