What would be the expected return on the portfolio


State of economy        Prob of Staet           Return on A       Return on B

Boom                              25%                     16%                    8%

Normal                            50%                      6%                      0%

Recession                       25%                      -8%                     4%

If you invest 70% in stock A and 30% in stock B, what would be the expected return on the portfolio?

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Finance Basics: What would be the expected return on the portfolio
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