An analyst has predicted the follow ing returns for Stocks A and B in three possible states

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An analyst has predicted the follow ing returns for Stocks A and B in three possible states o f the economy.

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a. W hat is the probability o f a recession?

b. Calculate the expected return o f Stocks A and B.

c. Calculate the expected return o f a portfolio th a t is invested 55% in A and 45% in B. L05

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