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Security Returns If State Occurs State of Probability of Economy State of Economy Roll Ross Bust .40 -16 % 17 % Boom .60 16 7

Security Returns If State Occurs
State of Probability of
Economy State of Economy Roll Ross
Bust .40 -16 % 17 %
Boom .60 16 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 amounts should be indicated by a minus sign. Round your Economy and E(R) answer to 2 decimal and Product answer 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 % %
Boom % %
E(R) = % E(R) = %

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