Expected Return Compute the expected return given these three economic states, their likelihoods, and the potential...

Question

Question

Expected Return Compute the expected return given these three economic states, their likelihoods, and the potential returns:

Answer 1

Answer #1

expected return=Respective return*Respective probability

=(0.3*31.5)+(0.4*6.75)+(0.3*-2.75)

which is equal to

=11.325%

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Answer 2

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