1A)

ou are going to make a portfolio consisting of 40 % of Lloyds of London Stock and 60 % of Tencent Stock. You also have the following information:

State i	Probability of State i	LofL Return	Tencent Return
Boom	80 %	12 %	11 %
Bust	20 %	-2 %	70 %

What is the expected return for the portfolio? (Answer as a percentage and Round to 2 decimals)

1B)

Consider the following information:

State i	Probability of State i	Actual Return of Google
Boom	32 %	9 %
Bust	68 %	1 %

What is the expected Return on Google Stock? (Answer as a percentage and Round to 2 decimals)

ANSWER