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Security Returns if State Occurs State of Economy Probability of State of Economy Bust Boom .60 .40 Roll -15% Ross 15% 32 5 Calculate

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Security Returns if State Occurs State of Economy Probability of State of Economy Bust Boom .60 .40 Roll -15% Ross 15% 32 5 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.) State of Economy Probability of State of Economy Bust .60 Boom .40 Roll Ross Return if State Occurs Product Return if State Occurs Product -15.00 % % 15% % 32 % % 5% % E(R) = 3.80 % E(R) = 11.00 %

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