Question: Problem 11-4 Expected Returns (L01, CFA1) Security Returns if State Occurs State of Economy Bust Boom Probability of State of Economy 0.50 0.50 Roll -12%

 Problem 11-4 Expected Returns (L01, CFA1) Security Returns if State Occurs

Problem 11-4 Expected Returns (L01, CFA1) Security Returns if State Occurs State of Economy Bust Boom Probability of State of Economy 0.50 0.50 Roll -12% 25 Ross 18% 6 Calculate the expected returns for Roll and Ross by filling in the following table: (A negative value should I minus sign. Do not round intermediate calculations. Calculate the product using the decimal value of th the percentage value of the return. Input all your answers as a percent rounded to 2 decimal places.) Roll Ross State of Economy Return if State Occurs Product Probability of State of Economy 0.50 Return if State Occurs Product Bust (12)% % 18% % Boom 0.50 25 % % 6 % % E(R)= 6.50 % E(R)=s 12.00%

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