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My doubt in this problem is: Here sign bit is 1 so the number is negative, so, don't we have to take 2's complement of the number 1.1111 here to get the exact number.

And 2nd doubt doubt is how to take 2's complement of a fractional number, like in this case.

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I can completely understand your confusion.

Now try to think why they have included a sign bit in format, logically sign bit has been included in the format because the computer doesn't have to worry about additional effort whether the sign of the number is negative or positive. If we have to represent mantissa in 2's complement then why there is need of sign bit!! the sign bit is included for this purpose.

well, I don't think there is any need of calculating 2's complement of the fraction in this question....

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