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 | .25 | 14.00 | ||||||||||
| Boom | .35 | 26.00 | ||||||||||
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Introduction To Derivatives And Risk Management
Authors: Don M. Chance, Robert Brooks
10th Edition
130510496X, 978-1305104969
