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Suppose your expectations regarding the stock market next year can be modeled by the following distribution: Use the above distribution to compute your expected return
Suppose your expectations regarding the stock market next year can be modeled by the following distribution: Use the above distribution to compute your expected return of the stock market. (Do not round intermediate calculations. Round your final answers to two decimal places.) Expected Return= Another analyst has different opinions regarding the probablities of Boom and Recession states, , though she agrees with you on all the other numbers in the table. You know that her expected stock market return is only 10%. What is the Boom probablity she has in mind? Enter decimals for this box. For example, 0.2,0.56. Keep two decimal places Boom Probablity= (Hint: You will need to reverse engineer the calculation in step 1 and solve an equation if necessary. Remember that all the probabilities in a distribution must sum up to 1. )
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