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8 2. You have a portfolio with three stocks and their rate of return in each of the three economy states are given as below:

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8 2. You have a portfolio with three stocks and their rate of return in each of the three economy states are given as below: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Boom Normal Bust .25 .72 03 Stock B .13 .05 Stock C .07 .13 .19 15 -29 .14 i. What is the expected return of Stock A? (4 points) i. What is the expected return of your stock portfolio, if your portfolio is equally weighted? (6 points)

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