10.14 Suppose that there are two stocks, A and B. Suppose that their returns are independent.

Stock A has a 40-percent chance of having a return of 15 percent and 60-percent chance of a return of 10 percent. Stock B has a one-half chance of a 35-percent return and a onehalf chance of a 5-percent return.

a. Write the list of all of the possible outcomes and their probabilities.

b. What is the expected return on a portfolio with 50 percent invested in stock A and 50 percent invested in stock B?