# Eg 15 should be entered as 1500 and not as 015 there

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form. E.g. 15% should be entered as 15.00 and not as 0.15) There are three new securities available in the market with four probable states of the economy. The following table shows the returns on these securities under each of the probable states and the probabilities for each state. State of Economy Probability Security 1 Security 2 Security 3 Mild Recession 10.0% 20.00% 2.00% -8.00% Low Growth 40.0% 12.00% 5.00% 4.00% Moderate Growth 40.0% 6.00% 10.00% 12.00% Rapid Growth 10.0% -4.00%

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15.00% 22.00% Given the probabilities for the four possible economic conditions, calculate the expected returns for security 1 (Enter your answer as a percentage, not in decimal �� form. E.g. 15% should be entered as 15.00 and not as 0.15) There are three new securities available in the market with four probable states of the economy. The following table shows the returns on these securities under each of the probable states and the probabilities for each state. State of Economy Probability Security 1 Security 2 Security 3 Mild Recession 10.0% 20.00% 2.00% -8.00% Low Growth 40.0% 12.00% 5.00% 4.00% Moderate Growth 40.0% 6.00%
10.00% 12.00% Rapid Growth 10.0% -4.00% 15.00% 22.00% Given the probabilities for the four possible economic conditions, calculate the expected returns for security 2 (Enter your answer as a percentage, not in decimal �� form. E.g. 15% should be entered as 15.00 and not as 0.15) State of Economy Probability ABC Stock XYZ Stock Severe Recession 15.00% 10.00% -5.00% Mild Recession 30.00% 8.00% -2.00% Slow Growth 35.00% -4.00% 11.00% Moderate Growth

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20.00% -8.00% 22.00%
• Fall '19
• Probability theory, Stock exchange, ABC Stock, probable states of the economy

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