Question
Use the following information about Ford and S&P 500 to solve the question below. State Probability S&P 500 return Ford's return Recession 0.30 -18% -22%
Use the following information about Ford and S&P 500 to solve the question below.
State | Probability | S&P 500 return | Ford's return |
Recession | 0.30 | -18% | -22% |
Normal | 0.50 | 10% | 12% |
Boom | 0.20 | 14% | 20% |
What is the expected return on the S&P 500?
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SOLUTION The expected return on the SP 500 can be calculated by multiplying the probability of each ...
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Fundamentals of Investments, Valuation and Management
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
8th edition
1259720697, 1259720691, 1260109437, 9781260109436, 978-1259720697
