Question

Suppose an investor creates a portfolio with 30% of her wealth invested in Stock A and the other 70% allocated to Stock B.

Calculate the expected return on the portfolio. (Enter percentages as decimals and round to 4 decimals)

State	Prob(State)	Stock A	Stock B	Stock C
Boom	30%	-12%	16%	-3%
Modest Growth	50%	30%	5%	-1%
Recession	20%	-12%	-1%	25%

Answer 1