Question: Given the following probability distributions, what are the expected returns for the Market and for Security J? Please show work. State PRJ rm rJ 1

Given the following probability distributions, what are the expected returns for the Market and for Security J? Please show work.

State

PRJ

rm

rJ

1

0.3

10%

40%

2

0.4

10

20

3

0.3

30

30

A 10.0%; 11.3%

B 13.0%; 10.0%

C 10.0%; 13.0%

D 10.0%; 9.5%

E 9.5%; 13.0%

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