You work for Financial Futures Investmenst

Finance Dec 26, 2020

You work for Financial Futures Investmenst. Looking at different outcomes for your stock based on how the ecomony has provide the following information State of Probability of State Rate of Return Economy of Economy if State Occurs Recession 20% 12% Normal 49% 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.) Expected return %

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	i	ii	iii=i*ii
State	Probability	Return	Expected return
Recession	20%	-12%	-2.40%
Normal	49%	14%	6.86%
Boom	31%	33%	10.23%
			14.69%

Ans =14.69

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