An analyst has predicted the following returns for stocks a


Question: An analyst has predicted the following returns for Stocks A and B in three possible states o f the economy.

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a. What is the probability of a recession?

b. Calculate the expected return of Stocks A and B.

c. Calculate the expected return of a portfolio that is invested 55% in A and 45% in B.

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Management Theories: An analyst has predicted the following returns for stocks a
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