Question: Problem 11-4 Expected Returns (L01, CFA1) Security Returns if State Occurs State of Probability of State Economy of Economy Roll Ross Bust .40 15% 15%

Problem 11-4 Expected Returns (L01, CFA1) Security Returns if State Occurs State of Probability of State Economy of Economy Roll Ross Bust .40 15% 15% Boom .66 22 5 Calculate the expected returns for Roll and Ross by filling in the following table: (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Calculate the product using the decimal value of the probability and the percentage value of the return. Input all your answers as a percent rounded to 2 decimal places.) Roll Ross Probability of . . State of Return If Return If Economy State Of State Occurs Product State Occurs Product Economy Bust .40 -15.00 % % 15 % % Boom .50 22 % % 5 % % E(R) = 7.20 % E(R) = 9.00 %

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