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Security Returns if State of Economy Bust Boom Probability of State of Economy State Occurs Roll Ross 0.60 0.40 -17% 20 13% 5 Calculate

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Security Returns if State of Economy Bust Boom Probability of State of Economy State Occurs Roll Ross 0.60 0.40 -17% 20 13% 5 Calculate the expected returns for Roll and Ross by filling in the following table: Note: 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. State of , Economy Probability of State of Economy Bust 0.60 Boom 0.40 Roll Ross Return if State Occurs Product Return if State Occurs Product -17 % % 13 % % 20 % % 5% % E(R) = (2.20) % E(R) = 9.80 %

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