Calculate the expected return on stock of Gamma Inc.: Probability of the statesP

Question

Calculate the expected return on stock of Gamma Inc.: Probability of the statesPercentage returns State of the economy Economic recession Steady economic growth Boom 30% 38% Please calculate it -30% 41% 14.3% Response ed Response Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units " box em Your Answer: Answer units Save Question 2 (1 point) Calculate the expected standard deviation on stock State of the economy Probability of the statesPercentage returns Economic recession Steady economic growth Boom 0% 8% 14% 13% Please calculate it ers to two dec inal places in percentage form. Tinle the percentage si n in the unitsboxy Your Answer:

Explanation / Answer

SInce multiple questions are posted, the first appearing question is answered below.

The following is the calculation of expected return of Gamma Inc.:

Therefore, expected return on Gamma inc Stock = 5.23%.

State of the economy Probablility Percentage return Probability * percentage return Economic recession 30% -3.0% (30% * (- 3%)) => - 0.9% Steady economic growth 38% 4.1% 1.558% Boom (100 % - 68%) 32% 14.3% 4.576% Expected return on Gamma Inc. 5.23%

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