Security Returns if State Occurs State of Economy Probability of State of Economy Roll Ross Bust .40 −11 % 15 % Boom .60 22 5 Calculate the expected return on a portfolio of 50 percent Roll and 50 percent Ross by filling in the following table: (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) State of Economy Probability of State of Economy Portfolio Return if State Occurs Product Bust .40 % % Boom .60 % % E(Rp)= %
Security Returns if State Occurs State of Economy Probability of State of Economy Roll Ross Bust .40 −11 % 15 % Boom .60 22 5 Calculate the expected return on a portfolio of 50 percent Roll and 50 percent Ross by filling in the following table: (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) State of Economy Probability of State of Economy Portfolio Return if State Occurs Product Bust .40 % % Boom .60 % % E(Rp)= %
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 26P
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Security Returns if State Occurs |
|||||
State of Economy | Probability of State of Economy |
Roll | Ross | ||
Bust | .40 | −11 | % | 15 | % |
Boom | .60 | 22 | 5 | ||
Calculate the expected return on a portfolio of 50 percent Roll and 50 percent Ross by filling in the following table: (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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