expected returns calculate the expected returns for roll and ross by filling in the 664843

Aug 30, 2021 | Uncategorized

 

Security   Returns If State Occurs

State of Economy

Probability of State of Economy

Roll

Ross

Bust

0.3

10%

21%

Boom

0.7

28

8

Expected Returns Calculate the expected returns for Roll and Ross by filling in the following table (verify your answer by expressing returns as percentages as well as decimals):

 

Roll

Ross

(1)
  State of
  Economy

(2)
  Probability of
  State of Economy

(3)
  Return If
  State Occurs

(4)
  Product
  (2)X(3)

(5)
  Return if
  State Occurs

(6)
  Product
  (2)X(5)

Bust

          

Boom