State of Economy Bust Boom State of Economy Probability of State of Economy 0.50 0.50 Bust Boom Security Returns if State Occurs Calculate the expected returns for Roll and Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Calculate the product using the decimal value of the probability and the percentage value of the return. Input all your answers as a percent rounded to 2 decimal places. Probability of State of Economy 0.50 0.50 Roll -188 19 Return if State Occurs -18 Ross 12% 5 Answer is complete but not entirely correct. Roll % 19 % E(R)= Product % 78.00 10.00 % 0.50 % Return if State Occurs 12 5 Ross % % E(R)- Product 12.00 % 5.00 % % 8.50
State of Economy Bust Boom State of Economy Probability of State of Economy 0.50 0.50 Bust Boom Security Returns if State Occurs Calculate the expected returns for Roll and Ross by filling in the following table: Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Calculate the product using the decimal value of the probability and the percentage value of the return. Input all your answers as a percent rounded to 2 decimal places. Probability of State of Economy 0.50 0.50 Roll -188 19 Return if State Occurs -18 Ross 12% 5 Answer is complete but not entirely correct. Roll % 19 % E(R)= Product % 78.00 10.00 % 0.50 % Return if State Occurs 12 5 Ross % % E(R)- Product 12.00 % 5.00 % % 8.50
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Mansukh
Transcribed Image Text:State of
Economy
Bust
Boom
State of
Economy
Probability of
State of Economy
Bust
Boom
0.50
0.50
Security Returns if
State Occurs
Calculate the expected returns for Roll and Ross by filling in the following table:
Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Calculate the product using
the decimal value of the probability and the percentage value of the return. Input all your answers as a percent rounded to 2
decimal places.
Probability
of
State of
Economy
0.50
0.50
Roll
-188
19
Return if
State Occurs
-18
19
Ross
12%
Answer is complete but not entirely correct.
Roll
%
%
E(R)=
Product
78.00 %
10.00 %
0.50 %
Return if
State Occurs
12
5
Ross
%
%
E(R)=
Product
12.00 %
%
5.00
8.50 %
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