You have a portfolio which is comprised of 60% of Stock A and 40% of Stock B. What is the expected return on this portfolio?
$\begin{array}{lllr}
\text { State of the Economy } & \text { Probability } &\text {E(R)}_{A}&\text { E(R)}_{B}\
\text { Weight }&&60\%&40\%\
\
\text { Boom }&.2&20\%&15\%\
\text { Normal } & .6 & 12\% &8 \% \
\text { Recegsion } & .2& -10 \% & 3\%
\end{array}$

A)7.30%
B)7.58%
C)8.03%
D)8.88%
E)9.40%

Question

You have a portfolio which is comprised of 60% of Stock A and 40% of Stock B. What is the expected return on this portfolio?
$\begin{array}{lllr}
\text { State of the Economy } & \text { Probability } &\text {E(R)}_{A}&\text { E(R)}_{B}\
\text { Weight }&&60\%&40\%\
\
\text { Boom }&.2&20\%&15\%\
\text { Normal } & .6 & 12\% &8 \% \
\text { Recegsion } & .2& -10 \% & 3\%
\end{array}$

A)7.30%
B)7.58%
C)8.03%
D)8.88%
E)9.40%

Quizplus · Accepted Answer

The Answer of You have a portfolio which is comprised of 60% of Stock A and 40% of Stock B. What is the expected return on this portfolio?
$\begin{array}{lllr}
\text { State of the Economy } & \text { Probability } &\text {E(R)}_{A}&\text { E(R)}_{B}\
\text { Weight }&&60\%&40\%\
\
\text { Boom }&.2&20\%&15\%\
\text { Normal } & .6 & 12\% &8 \% \
\text { Recegsion } & .2& -10 \% & 3\%
\end{array}$

A)7.30%
B)7.58%
C)8.03%
D)8.88%
E)9.40%

You Have a Portfolio Which Is Comprised of 60% of Stock