Given the following information, what is the expected return on a portfolio that is invested 30 percent in both Stocks A and C, and 40 percent in Stock B? Rate of Return if State Occurs: Stock B (%) State of Probability of Economy State Occurring Stock A (%) Boom 15.6 Normal 11.2 Recession 2.5 .08 .87 .05 13.2 9.6 1.2 Stock C (%) 12.9 8 -5.6

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Given the following information, what is the expected return on a portfolio that is invested 30 percent in both Stocks A and C, and 40 percent in Stock B?
Rate of Return if State Occurs:
Stock B (%)
13.2
9.6
1.2
State of Probability of
Economy State Occurring Stock A (%)
15.6
11.2
2.5
Boom
Normal
Recession
.08
.87
.05
Stock C (%)
12.9
8
-5.6
Transcribed Image Text:Given the following information, what is the expected return on a portfolio that is invested 30 percent in both Stocks A and C, and 40 percent in Stock B? Rate of Return if State Occurs: Stock B (%) 13.2 9.6 1.2 State of Probability of Economy State Occurring Stock A (%) 15.6 11.2 2.5 Boom Normal Recession .08 .87 .05 Stock C (%) 12.9 8 -5.6
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