Consider the following information: |
State of Economy | Probability of State of Economy |
Portfolio Return If State Occurs |
||||
Recession | .28 | − | .18 | |||
Boom | .72 | .22 | ||||
Calculate the expected return. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Expected return | % |
Expected Return=Respective Return*Respective probability
=(0.28*-18)+(0.72*22)
=10.8%
Consider the following information: State of Economy Probability of State of Economy Portfolio Return If State...
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