Question
Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone: (Do not round intermediate calculations.
| Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone: (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) |
| State of Economy | Probability of State of Economy | Security Return If State Occurs | ||||||||||
| Recession | .40 | 4.50 | % | |||||||||
| Normal | .50 | 13.00 | ||||||||||
| Boom | .10 | 25.00 | ||||||||||
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Applied Quantitative Finance
Authors: W.; T. Kleinkow; G. Stahl Hardle
1st Edition
3540434607, 978-3540434603
