State of Probability of State of Economy Economy 0.40 0.60 Bust Boom State of Economy Bust Boom Calculate the expected return on a portfolio of 55 percent Roll and 45 percent Ross by filling in the following table: Note: 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. Probability of State of Economy 0.40 0.60 Portfolio Return if State Occurs Security Returns if State Occurs Roll -10% 28 % % E(R₂) = Product Ross % % % 21% 8
State of Probability of State of Economy Economy 0.40 0.60 Bust Boom State of Economy Bust Boom Calculate the expected return on a portfolio of 55 percent Roll and 45 percent Ross by filling in the following table: Note: 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. Probability of State of Economy 0.40 0.60 Portfolio Return if State Occurs Security Returns if State Occurs Roll -10% 28 % % E(R₂) = Product Ross % % % 21% 8
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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Transcribed Image Text:State of
Economy
Bust
Boom
State of
Economy
Bust
Boom
Probability of State of
Economy
0.40
0.60
Probability
of State of
Economy
Calculate the expected return on a portfolio of 55 percent Roll and 45 percent Ross by filling in the following table:
Note: 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.
0.40
0.60
Portfolio Return if
State Occurs
Security Returns if State Occurs
Roll
%
%
E(Rp) =
-10%
28
Product
Ross
%
%
%
21%
8
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