Use the following information to answer the question.ProbabilityOutcomeReturn20%25%55%-20%15%35%RecessionExpansionBoomBased on above data, determine the expected return?Select one:a. 17.35%b. 16.72%c. 12.06%d. 19%

Expected return is sum of Probability * return in all outcomes.

Answered: Use the following information to answer…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider the following information: State ofEconomy Probability ofState of Economy Rate of Returnif State Occurs   Recession .44 −.13   Boom .56 .25 Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Consider the following information: State ofEconomy Probability of Stateof Economy Rate of Returnif State Occurs   Recession .21             –.12             Normal .48             .14             Boom .31             .33           Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Consider the following information:    State of Economy Probability of State of Economy Rate of Return if State Occurs Recession 0.11 -0.06 Normal 0.45 0.15 Boom 0.44 0.32 Calculate the expected return.
Calculate mean and standard deviation for the following asset. Economic State                     Return                        Probability Recession                                -20%                           25% Normal                                    15%                             50% Boom                                      30%                             25%
Considering the following information gathered:      State of Economy Probability of State of Economy Rate of Return if State Occurs   Recession 0.11 -0.03   Normal 0.45 0.16   Boom 0.44 0.29    Please Calculate the expected return. Multiple Choice 18.65% 2.80% 19.63% 20.61% 20.42%
Consider the following information: State ofEconomy Probability of Stateof Economy Rate of Returnif State Occurs   Recession .21             –.13             Normal .49             .15             Boom .30             .34           Calculate the expected return.
Find the expected return. State of the Economy Probability of State Occurring Stock's Expected Return Boom 30% 21.60% Normal 55% 13.50% Recession 15% –11.35%
Consider the following information: State ofEconomy Probability ofState of Economy Rate of Returnif State Occurs Recession .37 −.11 Boom .63 .23 Calculate the expected return.
Q2 Following are four economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast growth 0.30 60 % Slow growth 0.50 13 Recession 0.15 –15 Depression 0.05 -45 Compute the expected return and standard deviation. (Round your answers to 2 decimal places.) EXPECTED RETURN % STANDARD DEVIATION. %
Compute the expected return given these three economic states, their likelihoods, and the potential returns: Economic State Probability Return Fast Growth 0.3 40% Slow Growth 0.4 15% Recession 0.3 -15% Multiple Choice ___ 13.5 percent ___ 22.5 percent ___ 18.30 percent ___ 40.0 percent
Based on the following information, what is the standard deviation of returns? State of Economy Probability of Stateof Economy Rate of Return ifState Occurs Recession .28 − .096 Normal .41 .111 Boom .31 .221
Computer the expected return given these three economic states, their likelihoods, and the potential returns. Economic State Probability Return Fast Growth 0.40 25% Slow Growth 0.55 12% Recession 0.05 -50% Multiple Choice ___ -4.3 percent ___ 14.1 percent ___ 19.1 percent ___ 29.0 percent

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Use the following information to answer the question. Probability Outcome Return Recession 20% -20% Expansion Boom 25% 15% 55% 35% Based on above data, determine the expected return?