Following are three economic states, their likelihoods, and the potential returns: Probability Economic State Return Fast...

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Question

Following are three economic states, their likelihoods, and the potential returns: Probability Economic State Return Fast gro

Answer 1

Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

C D E Probability 0.20 Economic State Fast growth Slow growth Recession -M7000 Return 30.00% 5.00% -35.00% 0.58 0.22 Expected

Cell reference -

В. Probability Return Economic State Fast growth Slow growth Recession 0.2 0.58 0.22 0.3 0.05 -0.35 Expected return =SUMPRODU

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

Answer 2

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