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You decide to invest in a portfolio consisting of 30 percent Stock A, 30 percent...

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Accounting

You decide to invest in a portfolio consisting of 30 percent Stock A, 30 percent Stock B, and the remainder in Stock C. Based on the following information, what is the expected return of your portfolio?

State of Economy Probability of State Economy Return if State Occurs
Stock A Stock B Stock C
Boom .24 -17.4% -3.2% -22.1%
Normal .45 11.6% 7.8% 16.4%
Recession .31 27.2% 15.1% 31.0%

Multiple Choice

  • 11.52%

  • 9.74%

  • 10.19%

  • 12.56%

  • 10.63%

Answer & Explanation Solved by verified expert
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