Expected Return. Hull​ Consultants, a famous think tank in the​ Midwest, has provided probability estimates for the four potential economic states for the coming year. The probability of a boom economy is 13​%, the probability of a stable growth economy is 15​%, the probability of a stagnant economy is 52​%, and the probability of a recession is 20​%. Estimate the expected returns on the following individual investments for the coming​ year, ​Hint: Make sure to round all intermediate calculations to at least seven​ (7) decimal places. The input​ instructions, phrases in parenthesis after each answer​ box, only apply for the answers you will type. What is the expected return of the corporate bond​ investment?

Question

Expected Return.

Hull​ Consultants, a famous think tank in the​ Midwest, has provided probability estimates for the four potential economic states for the coming year. The probability of a boom economy is 13​%,

the probability of a stable growth economy is 15​%,

the probability of a stagnant economy is 52​%,

and the probability of a recession is 20​%.

Estimate the expected returns on the following individual investments for the coming​ year,

​Hint: Make sure to round all intermediate calculations to at least seven​ (7) decimal places. The input​ instructions, phrases in parenthesis after each answer​ box, only apply for the answers you will type.

What is the expected return of the corporate bond​ investment?

 

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