Expected Returns Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone:
|
State of |
Probability of |
Security Return |
|
Economy |
State of Economy |
if State Occurs |
|
Recession |
0.2 |
10% |
|
Normal |
0.5 |
20% |
|
Boom |
0.3 |
30% |
|
1 |