You own a portfolio with the following expected returns given the various states of the economy.What is the overall portfolio expected return?
A)6.49 percent
B)8.64 percent
C)8.87 percent
D)9.86 percent
E)10.23 percent

Question

You own a portfolio with the following expected returns given the various states of the economy.What is the overall portfolio expected return? 
A)6.49 percent 
B)8.64 percent 
C)8.87 percent 
D)9.86 percent 
E)10.23 percent

Quizplus · Accepted Answer

E(r) = (0.27 × 0.17) + (0.70 × 0.08) + (0.03 × -0.11) = 9.86 percent

You Own a Portfolio with the Following Expected Returns Given